Under what conditions will Big O Tires impose a Noncompliance Service Charge?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 8.08 Noncompliance Service Charge. In the event that Franchisee fails to comply with any obligation set forth in this Agreement or any mandatory standard or specification in the Manual or otherwise established by Big O, Big O shall have the right upon written notice to Franchisee to impose a noncompliance service charge ("Noncompliance Service Charge"). The Noncompliance Service Charge shall be in an amount of $500.00 for each event of noncompliance by Franchisee. The Noncompliance Service Charge is intended to compensate Big O for the administrative costs that it incurs in monitoring, notifying, and following up with Franchisee in the event of noncompliance. The imposition of the
Noncompliance Service Charge is in addition to any other rights or remedies that Big O may have in the event of noncompliance by Franchisee including, without limitation, any right to declare a default or terminate this Agreement as described in Article 1
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, a Noncompliance Service Charge may be imposed if a franchisee fails to meet obligations outlined in the Franchise Agreement, mandatory standards detailed in the Manual, or other requirements established by Big O Tires. Big O Tires will provide written notice to the franchisee before imposing this charge.
The Noncompliance Service Charge is $500.00 for each instance of noncompliance. This fee is intended to cover Big O Tires' administrative expenses related to monitoring, notifying, and following up with the franchisee regarding the noncompliance.
The imposition of the Noncompliance Service Charge does not limit Big O Tires' other rights and remedies. Big O Tires can still declare a default or terminate the Franchise Agreement as described in Article 19, in addition to levying the Noncompliance Service Charge. This means a franchisee could face multiple penalties for a single infraction, including financial penalties and potential termination of the franchise agreement.