Under what conditions must a Big O Tires franchisee reimburse Big O Tires for the cost of an audit?

According to Big O Tires' 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Big O Tires for the cost and expense of an examination or audit under specific circumstances. If an audit reveals that the franchisee has understated their store's gross sales by more than two percent, they are obligated to cover the costs. Additionally, if a franchisee obstructs or fails to cooperate with Big O Tires during the examination or audit process, they will also be responsible for reimbursing Big O Tires for the associated expenses.

This provision ensures that Big O Tires can accurately assess the financial performance of its franchise locations and maintain the integrity of its financial reporting. It also incentivizes franchisees to maintain accurate records and cooperate fully with any audits conducted by Big O Tires. The two percent threshold provides a reasonable margin of error, while the clause regarding obstruction of the audit serves to prevent franchisees from deliberately concealing financial discrepancies.

For a prospective Big O Tires franchisee, this means maintaining meticulous records and ensuring full cooperation during any audits. Failure to do so could result in unexpected expenses, potentially impacting the profitability of the franchise. Franchisees should implement robust accounting practices and train staff to handle audit requests professionally and transparently to avoid triggering these reimbursement obligations.

It is important to note that Big O Tires retains the right to conduct audits covering the entire period since the franchisee acquired the business, even after the termination of the franchise agreement. This underscores the importance of maintaining accurate records throughout the duration of the franchise relationship and beyond.