For Big O Tires, does the definition of 'Affiliate' include entities controlled through intermediaries?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
Affiliate – Includes each Entity, which directly, or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Big O or Franchisee, as applicable. Without limiting the foregoing, the term "Affiliate" when used herein in connection with Franchisee includes any Entity fifty percent (50%) or more of whose Equity or voting control is held by person(s) or Entities who, jointly, or severally, hold fifty percent (50%) or more of the Equity or voting control of Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the definition of "Affiliate" does include entities controlled through intermediaries. Specifically, the FDD states that an affiliate includes any entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Big O Tires or the franchisee, as applicable.
This broad definition has significant implications for prospective franchisees. It means that Big O Tires considers not only directly controlled entities as affiliates but also those controlled through multiple layers of ownership or management. This is a common practice in franchising, as it ensures that the non-compete and confidentiality obligations extend to a wide range of related parties.
Furthermore, the definition clarifies that an entity is also considered an affiliate of the franchisee if 50% or more of its equity or voting control is held by individuals or entities who also hold 50% or more of the equity or voting control of the franchisee. This ensures that any business with significant overlapping ownership with the franchisee is also bound by the terms of the franchise agreement, preventing potential conflicts of interest or competitive activities.