What security is required by Big O Tires for a real estate sublease?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
| Financing Program | Items Financed | Eligibility | Amount Financed | Interest Rate | Term | Security Required | Liability Upon Franchisees: | Payment Terms | |
|---|---|---|---|---|---|---|---|---|---|
| Default | Waiver of Legal Rights | ||||||||
| Real Estate Sub-lease (See Note 10) | Big O may lease space for your store and sublease it to you. | At Big O’s discretion. | Varies | Interest due only on past due rent. See Exhibit F. | Varies | Security deposit specified in sublease; personal guarantee by owners and others. | See Note 10. | Indemnification of Big O from claims arising from sublease. | Monthly rent payments on the first day of each month. |
Source: Item 10 — FINANCING (FDD pages 48–55)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, if Big O Tires leases space for a store and subleases it to a franchisee, the security required includes a security deposit specified in the sublease and personal guarantees from the owners and potentially others. The amount of the security deposit will vary. This financing option is at Big O's discretion.
This means that a prospective Big O Tires franchisee who subleases property from Big O Tires will likely need to provide a security deposit, the amount of which will be outlined in the sublease agreement. Additionally, the franchisee, along with other owners or potentially other individuals, will need to provide personal guarantees.
It is important for a potential franchisee to carefully review the sublease agreement and understand the terms of the personal guarantees, as these could have significant financial implications. The franchisee should also note that Big O Tires has the discretion to change these terms.