Does Big O Tires require franchisees to adhere to specific insurance requirements, as outlined in the administrative receipts section?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 21.01 Insurance Coverage. Franchisee shall, at its expense and no later than upon the Commencement Date (or the Effective Date, if later), procure and maintain in full force and effect throughout the term of this Agreement insurance that shall be in such coverages, limits and amounts as may from time to time be required by Big O in the Manual or otherwise and which shall designate Big O and Big O's Affiliates designated by Big O, and their directors, officers, employees, agents and other Big O designees as additional named insured(s).
- 21.02 Proof of Insurance. Prior to the Commencement Date (or the Effective Date, if later), Franchisee shall make timely delivery of a signed original certificate or certificates of all required insurance coverages to Big O, which shall contain the authorized agent's business name, address and phone number, together with a statement by the insurer that the policy will not be canceled or materially changed without at least sixty (60) days prior written notice to Big O that the alteration or cancellation is being made. All insurance coverages will be underwritten by a company acceptable to Big O, with a Best's Rating of no less than "A-" or a financial statement of the insurer approved by Big O. If Franchisee fails to purchase required insurance conforming to the standards prescribed by Big O, Big O may obtain such insurance for Franchisee, and Franchisee shall pay Big O the cost of such insurance plus a ten percent (10%) administrative surcharge. If Big O deems it appropriate, Franchisee shall, upon Big O's request, provide to Big O a true, complete certified copy of all, or a part of the Franchisee's insurance policies within 10 days of receiving such request. The Franchisee shall provide to Big O renewal certificates of insurance, or certified insurance binders, for all required coverages no fewer than 10 days before the indicated anniversary date(s) of such insurance coverages.
- 21.03 Survival of Indemnification. The procurement and maintenance of the prescribed insurance coverages set forth in the Manual shall not relieve Franchisee of any liability to Big O assumed under any indemnification requirement of this Agreement.
22. TAXES, PERMITS, AND INDEBTEDNESS
- 22.01 Payment of Taxes. Franchisee shall promptly pay when due any and all federal, state, and local taxes including without limitation, unemployment and sales taxes, levied or assessed with respect to any Products and Services distributed or sold pursuant to this Agreement and all accounts or other indebtedness of every kind incurred by Franchisee in the operation of the Franchised Business.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, franchisees are required to maintain specific insurance coverage throughout the term of the franchise agreement. Big O Tires dictates the required coverages, limits, and amounts in the Manual or otherwise. These insurance policies must designate Big O Tires and its affiliates as additional named insureds.
Prior to the commencement date or effective date, franchisees must provide signed original certificates of all required insurance coverages to Big O Tires. These certificates must include the authorized agent's business information and a statement from the insurer guaranteeing at least sixty days' prior written notice to Big O Tires before any cancellation or material change to the policy. All insurance coverages must be underwritten by a company acceptable to Big O Tires, with a Best's Rating of no less than "A-" or an approved financial statement.
If a franchisee fails to purchase the required insurance, Big O Tires has the right to obtain the insurance on behalf of the franchisee, and the franchisee will be responsible for the cost of the insurance plus a ten percent administrative surcharge. Big O Tires may also request a certified copy of the franchisee's insurance policies, which must be provided within 10 days. Franchisees must also provide renewal certificates of insurance or certified insurance binders at least 10 days before the anniversary dates of the insurance coverages. The insurance requirements do not relieve the franchisee of any liability to Big O Tires under any indemnification requirement of the Franchise Agreement. Prior to opening, franchisees must provide Big O Tires with written certificates or documentary evidence from an insurance company confirming they have obtained the prescribed insurance coverage.