What are the potential liabilities upon default of a real estate sublease with Big O Tires?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
Liability Upon Default: Loss of security deposit; termination of sublease; liability to Big O for all damages suffered and/or costs incurred as a result of default; late fees; interest; cost of collection
including attorneys' fees. Big O has a right of re-entry and the right to terminate the Franchise Agreement. See Sublease Exhibit F.
Source: Item 10 — FINANCING (FDD pages 48–55)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, if a franchisee defaults on a real estate sublease, they could face several liabilities. These include losing the security deposit provided at the start of the sublease, and the sublease itself may be terminated. Big O Tires also states that the franchisee may be liable to Big O Tires for all damages suffered and/or costs incurred as a result of the default.
Additional financial repercussions could include late fees and interest on overdue amounts. The franchisee may also be responsible for the cost of collection, including attorneys' fees, should Big O Tires need to take legal action to recover outstanding debts or damages. Furthermore, Big O Tires retains the right of re-entry to the property, meaning they can take back possession of the premises.
Finally, defaulting on the sublease can lead to the termination of the Franchise Agreement itself, as Big O Tires has the right to terminate the agreement in such cases. This comprehensive list of potential liabilities highlights the importance of meeting all obligations under the real estate sublease agreement with Big O Tires.