Under what conditions can Big O Tires terminate the franchise agreement for good cause?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
Big O may terminate this Agreement for good cause, without prejudice to the enforcement of any legal or equitable right or remedy, immediately upon giving written notice of such termination and the reason or cause for the termination, and, except as hereinafter provided, without providing Franchisee an opportunity to cure the default.
Without in any way limiting the generality of the meaning of the term "good cause," the following occurrences shall constitute sufficient basis for Big O to terminate the Agreement:
(a) If Franchisee fails to pay any financial obligation pursuant to this Agreement including, but not limited to, payments to Big O or any other supplier for Products and Services, and fails to cure such failure to pay within five (5) days after Big O gives Franchisee a written notice of default;
(b) If Franchisee fails to perform or breaches any covenant, obligation, term, condition, warranty, or certification herein and fails to cure such non-compliance within thirty (30) days after Big O gives Franchisee written notice of default;
(c) If Franchisee fails to open the Store and commence business within eighteen (18) months of the Effective Date of this Agreement, or if Franchisee fails to commence business on such other Commencement Date as the parties hereto may have agreed.
Notwithstanding the foregoing, Big O will agree to extend the time period to commence business so long as the Franchisee can demonstrate to Big O's reasonable satisfaction that the need to extend the time period is a result of factors beyond the Franchisee's reasonable control;
(d) If Franchisee makes, or has made, any materially false statement or report to Big O in connection with this Agreement or the application therefor;
(e) If Franchisee operates the Franchised Business or uses the Licensed Marks in a manner contrary to or inconsistent with this Agreement or Big O's policies, standards or specifications as stated in the Manual or elsewhere, and Franchisee fails to cure such deficiency within thirty (30) days after Big O gives a written notice of default;
(f) If Franchisee, an Owner, guarantor, or transferee violates any transfer or assignment provision contained in Section 18 of this Agreement;
(g) If Franchisee receives from Big O more than three (3) valid notices of default of this Agreement in the same twelve (12) month period, regardless of whether previous defaults have been cured;
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires's 2025 Franchise Disclosure Document, Big O Tires can terminate the franchise agreement for good cause. The FDD outlines several specific instances that constitute sufficient basis for termination. These include failure to pay financial obligations to Big O Tires or its suppliers, and not rectifying this within five days of written notice.
Other reasons for termination include failure to perform any covenant, obligation, term, condition, warranty, or certification, and not curing it within 30 days of written notice. Failing to open the store within 18 months of the agreement's effective date, or another agreed-upon commencement date, also constitutes grounds for termination, although Big O Tires may extend this period if the delay is due to factors beyond the franchisee's control. Providing materially false statements or reports to Big O Tires is another cause.
Further reasons for termination involve operating the franchised business or using licensed marks inconsistently with the agreement or Big O Tires's policies, standards, or specifications, and failing to correct this within 30 days of notice. Violating any transfer or assignment provision, or receiving more than three valid notices of default within a 12-month period, regardless of whether previous defaults were cured, are also grounds for termination. These stipulations provide Big O Tires with clear recourse in cases where franchisees are not adhering to the franchise agreement, while also outlining the franchisees' rights to rectify issues before termination occurs.