What is the definition of 'Big O I Tires' according to Big O Tires?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Big O will absorb Franchisee's costs for (i) claims related to replacement due to road hazards and/or workmanship and materials contemplated in the terms of the applicable Big O Program Products Warranty for Big O I Tires in accordance with the terms and procedures prescribed by the Manual; and (ii) claims related to the prorated manufacturer's workmanship and material warranty for Big O II Tires and any other tires that are Big O Program Products in accordance with the terms and procedures prescribed by the Manual (provided, however, that the warranty costs so absorbed will be included in the Warranty Costs used to determine the Big O Program Products Price).
At the end of the year, Big O will calculate the total amount of Mold Depreciation Cost to be allocated to Big O I Tires that were sold to Business Format Franchises, based on the Big O I Tire units sold to Business Format Franchise Stores as a percent of the total Big O I Tire units sold, and that amount will be compared to the total Mold Depreciation Cost actually included in the tire price for Big O I Tire units that were sold to Business Format Franchise Stores.
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- For the Big O I Tires warranty expense, the Franchisee Audit Committee, with the assistance of Big O management, will audit the proper inclusion or exclusion of the Big O I Tires warranty expense factor in each of the sales transactions to be audited during the Acquisition Cost of tires audit discussed above. In the event the results of that audit show that the Big O I Tires warranty expense factor has been included according to the Rules, the audit of that portion of the tire price will be deemed complete, and there will be no amount included in the End of Year Pricing Adjustment. In the event the results of that audit show that the Big O I Tires warranty expense factor has not been included according to the Rules, then Big O will calculate the impact, positive or negative, of the Big O I Tires warranty expense factor not being correctly included, based on the specific error identified and the time period that the error related to, and review the amount with the Franchisee Audit Committee. The Big O I Tires warranty expense factor pricing error impact will be included in the calculation, discussed below, of the End of Year Pricing Adjustment.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, a precise definition of "Big O I Tires" is not provided. However, the document does refer to "Big O I Tires" in the context of warranty expenses and pricing adjustments. Specifically, the FDD mentions that Big O Tires will absorb franchisee costs for claims related to replacement due to road hazards and/or workmanship and materials contemplated in the terms of the applicable Big O Program Products Warranty for Big O I Tires.
The document also details audit procedures related to the Big O I Tires warranty expense factor. The Franchisee Audit Committee, with the assistance of Big O management, will audit the proper inclusion or exclusion of the Big O I Tires warranty expense factor in sales transactions. If the audit reveals discrepancies, Big O will calculate the impact and include it in the End of Year Pricing Adjustment.
Furthermore, at the end of the year, Big O will calculate the total amount of Mold Depreciation Cost to be allocated to Big O I Tires that were sold to Business Format Franchises, based on the Big O I Tire units sold to Business Format Franchise Stores as a percent of the total Big O I Tire units sold, and that amount will be compared to the total Mold Depreciation Cost actually included in the tire price for Big O I Tire units that were sold to Business Format Franchise Stores. Any difference, positive or negative, will be included in the End of Year Pricing Adjustment. While the document does not explicitly define "Big O I Tires", it is implied that they are a specific type of tire covered under the Big O Program Products Warranty and subject to specific accounting and audit procedures.