Under what conditions will Big O Tires receive a refund from the company for a cancelled contract?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
e of PROGRAM. All other administrative forms, promotional displays, manuals are the responsibility of SELLER, however COMPANY may assist SELLER from time to time with materials for the PROGRAM.
- Section 2.2. COMPANY shall review, adjust, investigate and settle claims submitted by or on behalf of PRIMARY CONTRACT HOLDERS unable to return to SELLER and SECONDARY CONTRACT HOLDERS for repair or replacement service under a CONTRACT which are presented, verified, and approved by COMPANY under the PROGRAM.
- Section 2.3. COMPANY, upon proper cancellation of a CONTRACT, shall fulfill its obligations under the CONTRACT and provide refund(s) of its portion of the unearned CONTRACT premium, less cancellation fees, if any, and in accordance with all applicable state laws to SELLER. SELLER will reimburse CONTRACT HOLDERS all applicable fees.
- Section 2.4. The COMPANY shall maintain an insurance policy which will provide coverage for all proper claims submitted under the PROGRAM in all states regardless of whether such insurance coverage is required by law.
- Section 2.5.
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to the 2025 Big O Tires Franchise Disclosure Document, the circumstances under which Big O Tires, as the seller, would receive a refund from the company (ABS Operations LLC) for a cancelled Road Hazard Service Contract are detailed in Exhibit R, specifically within the Road Hazard Service Contract Franchisee Sales Agreement.
The document states that the company will review, adjust, investigate, and settle claims for contract holders unable to return to the seller for repair or replacement service, provided these claims are presented, verified, and approved by the company. Upon proper cancellation of a contract, the company is obligated to fulfill its responsibilities by providing refunds of the unearned contract premium, minus any cancellation fees, in accordance with state laws to the seller. The seller, in turn, is responsible for reimbursing the contract holders for all applicable fees.
However, the company retains the right to reject or cancel a contract under specific conditions, including ineligibility of the vehicle or tires for coverage, fraud in the contract or its use, incorrect or missing fee remittance, or failure to meet the company's underwriting guidelines. These stipulations ensure that refunds are processed only for legitimate cancellations and that Big O Tires franchisees, acting as sellers, understand the conditions under which contracts may be cancelled and refunds issued.