What are the requirements for a Big O Tires franchisee to renew or extend their franchise term?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement or Other Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Article 4 of the Franchise Agreement | The franchise term is 10 years, except that if you participate in our Existing Franchisee Growth financing program (described in Item 10), you must agree to an extended 20 year term. |
| b. | Renewal or extension of the term | Section 5.01 of the Franchise Agreement | Up to one additional term of 10 years after the initial term. Different renewal terms apply for franchisees who have executed a previous form of Franchise Agreement providing for alternative terms, as described in Item 5. We may agree to a shorter term, in our sole discretion, if your sublease or lease term does not equal the full term of the Successor Franchise Agreement. |
| c. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 80–85)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, a franchisee can renew their franchise for up to one additional term of 10 years after the initial term. However, the FDD notes that different renewal terms may apply to franchisees who executed a previous version of the Franchise Agreement. Big O Tires may also agree to a shorter renewal term if the franchisee's sublease or lease term does not equal the full term of the Successor Franchise Agreement.
To renew or extend the franchise term, a Big O Tires franchisee must provide notice of their intent to renew. They must also provide evidence of legal control of the premises where the store is located. The franchisee will need to sign a new franchise agreement, which will be in Big O Tires's then-current form.
Additionally, the franchisee is required to refurbish the store to meet current brand standards. They must pay a successor franchise administration fee, and sign a Successor Franchise Rider, which includes a general release. The franchisee must also meet the standards of compliance with the Franchise Agreement and the Big O Tires system. The FDD states that the new franchise agreement may contain terms and conditions that are materially different from the original contract, so prospective franchisees should carefully review any proposed changes.
Prospective franchisees should be aware that the renewal process involves significant obligations, including potential costs for refurbishment and the possibility of accepting new contract terms. It is important to discuss these requirements with Big O Tires and to seek legal counsel to fully understand the implications of renewing the franchise agreement.