factual

What obligation does Big O Tires have to maintain a competitive source of supply for franchisees?

Big_O_Tires Franchise · 2025 FDD

Answer from 2025 FDD Document

We acknowledge our obligation to have products available to our franchisees that enhance and support the Big O System, and further acknowledge our obligation to use reasonable commercial efforts to maintain a competitive source of supply for the benefit of our franchisees and to aid in the promotion of Big O products and services (Franchise Agreement Section 31(a)).

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEM AND TRAINING (FDD pages 55–73)

What This Means (2025 FDD)

According to the 2025 Big O Tires Franchise Disclosure Document, Big O Tires acknowledges its obligation to have products available to franchisees that enhance and support the Big O system. Furthermore, Big O Tires acknowledges its obligation to use reasonable commercial efforts to maintain a competitive source of supply for the benefit of its franchisees and to aid in the promotion of Big O products and services.

Big O Tires may periodically reduce service levels in delivering Big O Program Products based on changes in fuel costs or low order volume on particular delivery routes. Big O Tires also has a "fill rate" policy under which they will rebate to a qualified franchisee a portion of such franchisee's royalty payments if they fail to meet certain "fill rate" standards in their supply of products to Business Format Franchisees.

Big O Tires will also provide recommended prices for Big O brand tires and other brands of tires exclusive to Big O; however, franchisees are not required to sell at any particular price if such a requirement would be unlawful. Big O Tires periodically makes available programs offered to Franchisees by parts vendors approved by them, such as NAPA, O'Reilly's, and AutoZone. These programs may include features such as national account pricing, rebates paid directly to Franchisees, and prompt payment discounts.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.