For a Big O Tires franchise, how are Real Estate Taxes paid to the Landlord?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
8.2.
Real Estate Taxes.
Tenant will concurrently with Base Rent pay to Landlord as additional rent on an annual basis in twelve (12) equal monthly installments all Real Estate Taxes (as estimated by Landlord based upon the most recent assessment) assessed against the Leased Premises during the Term of this Lease or any extensions thereof. "Real Estate Taxes" will include: (i) any form of annual or annualized tax or assessment (including any so called special assessment), license fee, license tax, business license fee, business license tax, commercial rental tax, levy, charge, penalty or tax imposed by any authority having the direct power to tax, including any city, county, state or federal government, or any school, agricultural, lighting, water, drainage, sanitation or other improvement or special district against the Leased Premises or any legal or equitable interest of Landlord in any of them; (ii) any tax on Landlord's right to rent the Leased Premises or against Landlord's business of leasing the Leased Premises; and (iii) any assessment, tax, fee, levy or charge of substitution, partially or totally, of or in addition to any assessment, tax, fee, levy or charge previously included within the definition of Real Estate Taxes which may be imposed by governmental agencies for such services as fire protection, street, sidewalk and road maintenance, refuse removal, and for other governmental services formally provided without charge to property owners or occupant.
All such new and increased assessments, taxes, fees, levies and charges will be included within the definition of Real Estate Taxes for the purposes of this Lease.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the tenant, who is the franchisee, will pay real estate taxes to the landlord. These payments are considered additional rent. The franchisee will make twelve equal monthly installments annually, coinciding with the base rent payments. The amount is estimated by the landlord based on the most recent assessment of the leased premises.
Real estate taxes include various forms of taxes, fees, and assessments imposed by any authority with taxing power. This encompasses annual taxes, special assessments, license fees and taxes, commercial rental taxes, levies, charges, or penalties. It also includes taxes on the landlord's right to rent the premises or the business of leasing the premises. Furthermore, it covers any assessment, tax, fee, levy, or charge that substitutes or adds to existing real estate taxes for services like fire protection, street maintenance, refuse removal, and other governmental services.
Any new or increased assessments, taxes, fees, levies, and charges will be included within the definition of real estate taxes for the purposes of the lease. This ensures that the landlord is fully compensated for all property-related taxes and assessments throughout the term of the lease and any extensions.