Does the Big O Tires plan include a binding arbitration agreement?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
- ARBITRATION.
29.01 Mediation. Except for actions related to or based on the Marks or the copyrights of Big O or to enforce the provisions of Article 20 of this Agreement, which Big O may bring in a court of competent jurisdiction, all controversies, disputes claims, causes of action and/or alleged breaches or failures to perform between Big O, its subsidiaries and affiliated companies or their shareholders, officers, directors, agents, employees and attorneys, in their representative capacity, and Franchisee, and its employees, officers, directors, owners, guarantors or agents, arising out of or related to: (1) this Agreement; (2) the relationship of the parties; (3) the validity of this Agreement; or (4) any aspect of the Franchised Business (collectively, "Claims") shall first be submitted by the parties to non-binding mediation before the AAA to be conducted at the offices of AAA in the nearest major metropolitan area to the party who is not demanding the mediation (e.g., West Palm Beach, Florida for Big O). The mediation will be held, and the parties agree to make themselves available for such mediation, within 45 days following submission of the request to the AAA for mediation. The cost of the mediator shall be split equally among the parties with each party bearing its own costs related to the mediation, including attorneys' fees. The parties agree to act in good faith attempt to resolve the Claim through mediation. Notwithstanding the language above, if the action is based on a separate agreement or instrument between Franchisee and Big O, such as a promissory note or lease, the dispute resolution procedure in that agreement or instrument will control rather than this Section 29.01; provided, that, at Big O's sole option, any claim of Big O against Franchisee based on a promissory note executed by Franchisee in favor of Big O may be brought in mediation in conjunction with a dispute between the parties that is subject to mediation under this Section, regardless of any provisions to the contrary contained in the promissory note. The mediation shall be conducted in English only, although Franchisee shall have the right, at Franchisee's option and sole expense, to have a translator present at the mediation. The expense of a translator shall not be considered a cost or expense related to an action pursuant to Section 29.07(b) of this Agreement. If the parties are unable to resolve a Claim through mediation, then Section 29.02 shall apply.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, the franchise agreement includes a clause that requires non-binding mediation before the American Arbitration Association (AAA) for most disputes. However, if mediation fails, the document does not specify that binding arbitration is required. This initial mediation applies to controversies, disputes, claims, causes of action, and alleged breaches related to the agreement, the relationship between the parties, the validity of the agreement, or any aspect of the franchised business.
There are exceptions to this mediation requirement. Specifically, actions related to or based on Big O Tires's marks or copyrights, or to enforce provisions of Article 20 of the agreement, can be brought in a court of competent jurisdiction. Additionally, if a separate agreement or instrument exists between the franchisee and Big O Tires, such as a promissory note or lease, the dispute resolution procedure in that agreement will take precedence, unless Big O Tires opts to include a claim based on a franchisee's promissory note in the mediation.
The mediation process is to be conducted at the AAA offices nearest to the party not demanding mediation, and it must occur within 45 days of the request submission. The costs for the mediator are to be split equally between the parties, with each party bearing their own additional costs, including attorney's fees. The mediation will be conducted in English, although the franchisee can have a translator present at their own expense. If mediation does not resolve the claim, the FDD indicates that Section 29.02 shall apply, but the details of Section 29.02 are not provided in the excerpt.