What is the exception to the first option rights granted to Big O Tires franchisees?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
First Option Rights. Subject to certain exceptions generally described in this paragraph or Item 12, each franchisee is granted an option to apply for any new Big O franchise to be located within five miles of the franchisee's existing Big O Store, determined as a radius of five miles from the geographic center of your location. You must meet certain conditions to exercise your First Option Rights, including that you are in compliance with your Franchise Agreement, as determined solely by Big O. If you apply for a Big O franchise using your first option rights, the franchise deposit of $10,000 must be paid with your application to exercise your first option rights. The balance of the initial franchise fee must be paid to us at the time specified by us in our notice of the right to exercise first option rights, but in no event later than the earlier of: (a) date you sign the new Franchise Agreement, or (b) 120 days from the deadline for submitting an application to Big O to exercise your first option rights (this deadline is 30 days after Big O gives notice that the franchisee may exercise its first option rights). The franchise deposit becomes nonrefundable upon our approval of your franchise application. See Item 12 for a more detailed discussion on your First Option rights.
Source: Item 5 — INITIAL FEES (FDD pages 14–21)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, franchisees are generally granted the first option to apply for a new Big O Tires franchise within a five-mile radius of their existing store. This right is subject to certain exceptions, as generally described in the quoted paragraph or in Item 12 of the FDD.
To exercise these first option rights, a franchisee must meet specific conditions, including compliance with their existing Franchise Agreement, as determined solely by Big O Tires. If a franchisee applies for a new franchise using their first option rights, they must submit a $10,000 deposit with their application.
The balance of the initial franchise fee is due at a time specified by Big O Tires, but no later than either the date the new Franchise Agreement is signed or 120 days from the deadline for submitting the application. The franchise deposit becomes nonrefundable once Big O Tires approves the franchise application. For a more detailed explanation of first option rights, prospective franchisees should refer to Item 12 in the FDD.