Can Big O Tires redefine a franchisee's Trade Area?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
Your Franchise Agreement grants to you the right to operate one Big O store at a single location. However, subject to the limitations described in this Item 12, we agree not to operate for our self or grant to any other person the right to operate any more than one Big O Store for every 50,000 persons residing in your Trade Area. Trade Area is defined in Schedule 1 to the Franchise Agreement. We may, in our discretion, redefine the Trade Area as population increases or moves within your Trade Area. In light of the limitations on your territorial rights described in this Item 12, we make the following disclosure: You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Source: Item 12 — TERRITORY (FDD pages 73–75)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, the franchisor has the discretion to redefine a franchisee's Trade Area as population increases or moves within that area. The Franchise Agreement grants the franchisee the right to operate one Big O Tires store at a single location. Big O Tires agrees not to operate or grant to any other person the right to operate more than one Big O Tires store for every 50,000 persons residing in a franchisee's Trade Area. The Trade Area is specifically defined in Schedule 1 of the Franchise Agreement.
This means that while franchisees are granted a Trade Area, it is not necessarily fixed. Big O Tires retains the right to adjust the boundaries of that area based on demographic shifts. This could potentially impact a franchisee's business if their Trade Area is reduced, as it could limit their customer base. Conversely, an increase in the Trade Area could present new opportunities for growth.
It is important to note that Big O Tires does not grant exclusive territories. Franchisees may face competition from other franchisees, company-owned outlets, other channels of distribution, or competitive brands controlled by Big O Tires. Additionally, other franchisees may solicit and make sales in a franchisee's Trade Area. A Big O Tires store cannot be relocated without prior written approval from Big O Tires, and such relocation will generally be approved if the new location meets the then-current criteria for a Big O Tires store location, does not violate the territorial rights of any other Big O Tires store, and Big O Tires determines the relocation will not otherwise be detrimental to other franchisees or to Big O Tires itself.