What is the geographic radius of the post-termination non-compete restriction for a Big O Tires franchisee, measured from the former franchise location or any other Big O Tires store?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee terminates this Agreement other than in a manner prescribed by Section 19.04, if this Agreement is terminated pursuant to Section 18.05(d), or if this Agreement is terminated for "good cause" as defined in Section 19.01, Franchisee, its Owners, officers, directors, and guarantors covenant that they shall not directly or indirectly, for a period of two (2) years after the Termination Date of this Agreement, engage in any business, other than as a Franchisee of the Big O System, or as a franchisee of any affiliate or parent of Big O, or their subsidiaries, which offers or sells tires, wheels, automotive services, or other products or services which compete with Big O Products and Services within a ten (10) mile radius of the Premises or within a ten (10) mile radius of any other Big O Store which was operational or under construction on the Termination Date.
If a former Franchisee or guarantor commits a breach of this Section 17.04, the two year period shall start on the date that the former Franchisee or guarantor is enjoined from competing or stops competing, whichever is later.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, a franchisee who terminates the agreement in a manner not prescribed by Section 19.04, or if the agreement is terminated pursuant to Section 18.05(d), or is terminated for "good cause" as defined in Section 19.01, is subject to a post-termination covenant not to compete. This covenant applies to the franchisee, their owners, officers, directors, and guarantors.
Under this covenant, for a period of two years after the termination date, the franchisee is restricted from engaging in any business that competes with Big O Tires. This restriction applies within a 10-mile radius of the former franchise location (the Premises) or within a 10-mile radius of any other Big O Tires store that was operational or under construction on the termination date.
This means that a former Big O Tires franchisee is prohibited from operating a competing tire, wheel, or automotive service business within the specified radius around their old location or any other existing or planned Big O Tires store. The two-year non-compete period restarts if the former franchisee breaches this agreement, beginning from the date they are legally stopped from competing or voluntarily cease competing, whichever occurs later. This provision aims to protect Big O Tires's market and brand integrity by preventing former franchisees from directly competing in close proximity to existing locations.