Under what condition may Big O Tires condition its approval of a Store lease?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee before the Store may be opened or relocated. Big O may condition its approval of a Store lease upon Franchisee's execution of a conditional lease assignment in a form, which is the same as, or similar to the one found on Schedule 4. If Franchisee has been a Big O franchisee for ten years or less and if Franchisee or any of Franchisee's owners (if Franchisee is a business entity or trust) owns an interest in the real estate on which the Store is located, owns an interest in an entity that owns the real estate (including an entity such as a trust of which the Franchisee is a beneficiary), or if such real estate is owned by an immediate family member of such person, Big O may require Franchisee to enter into an Option and Store Lease with Big O or its affiliate in the then-current form in use by Big O or its affiliate in the then-current form in use by Big O, which would give Big O or its affiliate the right to lease the Premises in the event this Agreement is terminated or expires, if Big O or its affiliate chooses to exercise such option. If Franchisee has been a Big O franchisee (or owned more than 50% of the Franchisee Entity) for more than ten years and is leasing the site upon which the Store is located from any of Franchisee's owners (if Franchisee is a business entity or trust), or an entity that is owned, in whole or in part, by Franchisee or any of Franchisee's owners, or an immediate family member of Franchisee, Franchisee will have the option to sign a modified form of lease assignment which is attached as Schedule 5 to the Franchise Agreement (instead of the Option and Store Lease). A Memorandum of Lease Option or a Memorandum of Lease Rider and Modification may be recorded or filed by Big O or its affiliate in the event an Option and Store Lease is required.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, Big O Tires may condition its approval of a store lease upon the franchisee's execution of a conditional lease assignment. This assignment would be in a form similar to the one found on Schedule 4 of the franchise agreement.
Additionally, if a franchisee has been a Big O Tires franchisee for ten years or less, and they or their owners have an interest in the real estate where the store is located, or if the real estate is owned by an immediate family member, Big O Tires may require the franchisee to enter into an Option and Store Lease with Big O Tires or its affiliate. This agreement would grant Big O Tires or its affiliate the right to lease the premises if the Franchise Agreement is terminated or expires, and Big O Tires chooses to exercise that option.
However, if the franchisee has been a Big O Tires franchisee for more than ten years and is leasing the site from their owners, an entity owned by them, or an immediate family member, the franchisee has the option to sign a modified form of lease assignment, which is attached as Schedule 5 to the Franchise Agreement, instead of the Option and Store Lease. In the event an Option and Store Lease is required, Big O Tires or its affiliate may record or file a Memorandum of Lease Option or a Memorandum of Lease Rider and Modification.