Are Big O Tires franchisees required to participate in national fleet account programs?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement also provides that you must comply with Big O's national fleet account policies and must participate in Big O's national fleet account programs, which are described in Item 11 (see paragraph 7 under "Continuing Obligations"). Also, periodically, we may institute pricing or discount programs in which the availability of lower prices or of discounts may depend, in whole or in part, on your meeting certain requirements established by us.
Tires. We sell lines of private label tires to Big O Tire Stores. These private label tires may be manufactured by Sumitomo Corporation, which holds a partial indirect ownership interest in us, or unaffiliated manufacturers. We may look to other manufacturers to produce tire products in the future. We do not manufacture tires. Most products are delivered to franchisees from the RDC servicing their area at a minimum of twice weekly. We commit to supply you with the Big O branded tire lines but we do not guarantee to supply you with any specific numbers or sizes of tires or with any other specific tire brands. However, we do have a fill rate policy which is described in Item 6, Note 2.
We are the only approved supplier of Big O private brand tires and other private brand products which are manufactured exclusively for us or TBC. We may add or change private brands of tires and other products periodically. We are also an approved supplier of various major brand tires.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 39–44)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, franchisees must comply with Big O's national fleet account policies and participate in Big O's national fleet account programs. This requirement is outlined in the Franchise Agreement and further described in Item 11, specifically paragraph 7 under "Continuing Obligations."
Participation in these national fleet account programs means that Big O Tires franchisees must adhere to the standards and procedures set by Big O Tires for handling national fleet customers. These programs are designed to provide consistent service and pricing to large fleet accounts across all Big O Tires locations. Franchisees are required to process National Fleet Account transactions through third parties selected by Big O Tires. Currently, these third parties charge a fee of 1.25% of the transaction amount, plus $0.95 per transaction. While Big O Tires does not currently collect a handling fee, they may do so in the future.
Big O Tires also receives a processing allowance from one tire manufacturer, up to 3% of the transaction amount for certain tire brands installed through the National Fleet Account programs. This allowance is intended to partially reimburse Big O Tires for the expenses associated with administering the program. Big O Tires may receive additional allowances from this manufacturer and other parties related to processing National Fleet Account transactions in the future.
For a prospective franchisee, this means they must be prepared to integrate these programs into their business operations and comply with the associated fees and policies. Understanding the specifics of these programs, including the third-party fees and any potential allowances, is crucial for assessing the financial implications of operating a Big O Tires franchise.