As of March 31, 2023, what financial information is available for Big O Tires?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
s and Basis of Presentation**
Operations
TBC Holdings, LLC and subsidiaries ("Holdings" or the "Company") is one of the United States' largest independent marketers of tires for the automotive replacement market. The Company's operating activities are comprised of its franchise and wholesale divisions. The Company operates or acts as a franchisor of retail tire and automotive service centers throughout the United States of America, Canada, Europe, and other countries under the following trade names: Big O Tires ("Big O") and Midas. The Company operates as a wholesaler of tires and automotive parts primarily in the United States of America, Canada, and Mexico under the following trade names: TBC Brands, NlW, and TBC de Mexico. As of March 31, 2025, the Company had 461 franchised Big O stores, operated 147 warehouse locations, and had 1,167 Midas stores included in assets held for sale. As of March 31, 2024, the Company had effectively sold, closed, or disposed of all its retail locations and had 1,623 franchised stores and operated 149 warehouse locations. As of March 31, 2023, the Company had a total of 2,246 retail locations, consisting of 595 Companyoperated locations included in discontinued operations, 28 Company-operated locations included in continuing operations, 2 mobile operations, and 1,621 franchised stores. The Company operated 151 warehouse locations as of March 31 , 2023.
Ownership Structure
On January 2, 2018, a definitive merger agreement was entered into between Michelin North America, Inc. ("MNAI") and Sumitomo Corporation of Americas ("SCOA"), also referred to as ("Members") to fonn a joint venture under the name of TBC Holdings, LLC and Subsidiaries. The joint venture was formed through SCOA contributing TBC Corporation ("TBC") to Holdings for 50% joint venture ownership and MNAI contributing Tire Centers, LLC ("TCi"), its wholesale company, and cash for 50% joint venture ownership.
On April 5, 2018, the joint venture transaction closed, and the Members entered into an operating agreement, which provides each Member 50% of the Membership Interest in Holdings. Each Member shall be liable only to make such Member's capital contribution to the Company and certain other payments expressly provided within the operating agreement. The Company is to be managed by a joint Board of Managers (the "Board"), consisting of three designated MNAI managers and three designated SCOA managers.
Definition of Fiscal Year
As used in these consolidated financial statements and related notes to the consolidated financial statements, "Fiscal 2022," refers to the year ended March 31, 2023, "Fiscal 2023," refers to the year ended March 31, 2024, "Fiscal 2024," refers to the year ended March 31, 2025, and "Fiscal 2025", "Fiscal 2026", "Fiscal 2027" and "Fiscal 2028" refer to the years ending March 31, 2026, 2027, 2028, and 2029, respectively.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of TBC Holdings, LLC and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
(A Joint Venture of Michelin North America, Inc. and Sumitomo Corporation of Americas) Notes to Consolidated Financial Statements March 31, 2025, 2024 and 2023
(USD in thousands, unless otherwise noted)
Use of Estimates
The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America.
Source: Item 21 — FINANCIAL STATEMENTS (FDD pages 101–102)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, as of March 31, 2023, the company had 1,621 franchised stores and operated 151 warehouse locations. At that time, the company had a total of 2,246 retail locations, including 595 company-operated locations in discontinued operations, 28 company-operated locations in continuing operations, and 2 mobile operations. The FDD also includes the audited consolidated financial statements of TBC Holdings and its subsidiaries as of March 31, 2023, for the year then ended. TBC Holdings guarantees Big O Tires' obligations under the Franchise Agreement, and this guaranty is included with the financial statements.
Additionally, in November 2022, Big O Tires, LLC, a subsidiary of the Company, entered into an asset purchase agreement with an existing franchisee to assume the leases, purchase inventory and fixed assets, and operate 13 of the company-operated Big O Retail stores under a Big O Franchise agreement. The assets and liabilities from the company-operated stores were assumed by the franchisee, who paid a total consideration of $6,565. The Company recorded a pre-tax gain on disposition of $2,498, which is recorded in gain on sale of business operations in the accompanying consolidated statements of operations and comprehensive income.
Effective June 1, 2023, the company disposed of its remaining 16 corporate-operated Big O Retail stores. The company recorded a pre-tax loss on disposition of $17,063, which is recorded in impairment on closure of business in the accompanying consolidated statements of operations and comprehensive income. Effective March 31, 2024, the Company disposed of its Guatemala based warehouse operation. The Company recorded a pre-tax loss on disposition of $1,600, which is recorded in impairment on closure of business in the accompanying consolidated statements of operations and comprehensive income.