Are there any restrictions on transfer fees for a Big O Tires franchise, and if so, what are they?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (iv) Prior to the consummation of any such Transfer, Franchisee shall pay all amounts due to Big O and cure all other breaches of this Agreement and any other agreement or loan document it may have with Big O;
- (v) Big O will, as a condition of any Transfer involving an assignment of this Agreement or a Change in Control, require Franchisee or transferee to pay a transfer fee (but no initial franchise fee). The transfer fee will be as set by Big O from time to time (and is currently $5,000). Franchisee acknowledges that such a transfer fee is appropriate as necessary to reimburse Big O for any expenses which may be incurred in its review, analysis, and preparation of any documentation relating to the Transfer, including legal and accounting fees, and additional assistance as may be requested by the Franchisee related to the Franchisee's resale of the Store but is not determined by the actual amount of such expenses and costs. In addition, if the transferee requires training, Franchisee or the transferee will also be charged a training fee of up to five thousand five hundred dollars ($5,500) for one person plus, in Big O's discretion, a reasonable additional training fee if additional training is required as described in Section 18.04(b)(iii), plus additional training fees shall apply for additional trainees. The transferee shall be responsible for all transportation, lodging and living expenses (other than lodging expenses for the first trainee) incurred by the transferee's trainees while attending the training. Big O shall be the sole arbiter of whether a Change in Control occurred as a result of a single Transfer or a group of Transfers. For any Transfer not involving an assignment of this Agreement or a Change of Control, Big O will, as a condition of any such Transfer, require the Franchisee or the transferee to pay a transfer fee (but no initial franchise fee) equal to Big O's expenses that it incurs in its review, analysis and preparation of any documentation relating to the Transfer, including legal and accounting fees and additional assistance as may be requested by the Franchisee related to the resale of the Store, but not more than one thousand five hundred dollars ($1,500). Big O shall be the sole arbiter of whether a Change in Control will occur as a result of a single Transfer or a group of Transfers;
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to the 2025 Big O Tires Franchise Disclosure Document, there are specific transfer fee requirements depending on the nature of the transfer. For transfers involving an assignment of the Franchise Agreement or a change in control, Big O Tires requires the franchisee or transferee to pay a transfer fee, but not an initial franchise fee. The standard transfer fee is $5,000 per store. This fee is intended to cover Big O Tires' expenses related to reviewing, analyzing, and preparing transfer-related documentation, including legal and accounting fees, as well as any additional assistance requested by the franchisee during the resale of the store.
In addition to the transfer fee, if the transferee requires training, Big O Tires will charge a training fee of up to $5,500 for one person. Additional training for more people will incur further fees. The transferee is also responsible for covering all transportation, lodging, and living expenses for the trainees, except for the lodging expenses of the first trainee. Big O Tires retains the sole discretion to determine whether a change in control has occurred, whether through a single transfer or a series of transfers.
For transfers that do not involve an assignment of the Franchise Agreement or a change in control, Big O Tires requires the franchisee or transferee to pay a transfer fee equal to Big O Tires' expenses for reviewing, analyzing, and preparing transfer-related documents. However, this fee will not exceed $1,500. It's important to note that any transfer that does not comply with the terms outlined in Section 18 of the Franchise Agreement will be considered null and void. Franchisees must also settle all outstanding amounts owed to Big O Tires and rectify any breaches of the Franchise Agreement before the transfer can be completed.