What interest rate does Big O Tires charge for inventory financing?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
| Financing Program | Items Financed | Eligibility | Amount Financed | Interest Rate | Term | Security Required | Liability Upon Franchisees: | Payment Terms | |
|---|---|---|---|---|---|---|---|---|---|
| Default | Waiver of Legal Rights | ||||||||
| Other Financing (See Note 15) | Inventory | In our discretion | Varies. In last fiscal year, three franchisees borrowed a total of $ 299,952.53. | Prime plus 3% per annum. | Varies, generally not more than 36 months. In last fiscal year, no term longer than 36 months. | Varies. Generally, all assets of your Store. | As provided in Exhibits G and H (See Note 8). | As provided in Exhibits G and H (See Note 8). | Varies |
Source: Item 10 — FINANCING (FDD pages 48–55)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the interest rate for inventory financing is prime plus 3% per annum. This rate is based on the prime rate published in the Wall Street Journal. In the last fiscal year, Big O Tires provided inventory financing to three franchisees, with the total amount borrowed reaching $299,952.53.
This financing option is available at Big O Tires' discretion, and the term generally does not exceed 36 months. During the last fiscal year, no term was longer than 36 months. The security required for this financing typically includes all the assets of the franchisee's store.
It's important to note that the specific terms and conditions, including the interest rate and security requirements, can vary. The promissory notes and security agreements associated with this financing will outline the liabilities and waivers of legal rights for the franchisee. Prospective franchisees should carefully review Exhibits G and H, as referenced in Note 8, to fully understand their obligations and potential risks.