What is the interest rate Big O Tires charges on overdue fees, and how is it calculated?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
If any fee or any other amount due under this Agreement, including payments for Products and Services, is not received within ten (10) days after such payment is due, Franchisee shall pay Big O interest equal to the lesser of the daily equivalent of eighteen percent (18%) per annum of such overdue amount per year, or the highest rate then permitted by applicable law, for each day such amount is past due.
This interest rate shall apply as the post-judgment interest rate, regardless of the applicable statutory rate, in the event of any legal actions related to this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, if a franchisee fails to make timely payments for any fees, products, or services, they will incur interest on the overdue amount. Specifically, if any amount due under the Franchise Agreement is not received within ten days of the due date, Big O Tires will charge interest.
The interest rate applied to the overdue amount is the lesser of two options: either the daily equivalent of eighteen percent (18%) per annum, or the highest rate permitted by applicable law. This interest is calculated for each day the amount remains unpaid.
Furthermore, the FDD specifies that this interest rate will also be used as the post-judgment interest rate in the event of any legal actions related to the Franchise Agreement, regardless of the statutory rate that might otherwise apply. This means that if Big O Tires wins a legal judgment against a franchisee, the same interest rate used for overdue payments will be applied to the judgment amount.