Can Big O Tires update the Royalty Matrix during the course of a calendar year?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
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- g. Big O, at its sole discretion, may update the Royalty Matrix during the course of a calendar year based on the Store-level retail sales for the 12-month period ending the most recent October 31 or any other more recently ended full or partial 12-month period selected by Big O.
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- Determining the Matrix Royalty Rate for a Particular Franchisee. In general, the Matrix Royalty Rate for a franchisee in any particular calendar year depends on the Gross Sales of the franchisee's single Store in that calendar year or, if the franchisee's Stores are members of a Multi-Store Royalty Group, the Gross Sales of all the Stores in the Multi-Store Royalty Group for that cale
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 has the discretion to update the Royalty Matrix during a calendar year. These updates can be based on store-level retail sales data from the 12-month period ending the most recent October 31, or any other more recently ended full or partial 12-month period selected by Big O Tires.
For franchisees, this means that the royalty rates they pay could change mid-year, impacting their profitability. It is important to note that if there is a change in the Matrix Royalty Rate during the year, Big O Tires is entitled to use its reasonable discretion in applying the applicable rates to sales for the periods in which those rates were in effect.
This flexibility allows Big O Tires to respond to changing market conditions or business performance, but it also introduces an element of uncertainty for franchisees. Franchisees should stay informed about their store's sales performance and any potential changes to the Royalty Matrix to effectively manage their finances. Franchisees should also maintain open communication with Big O Tires to understand the rationale behind any mid-year adjustments and how they will be implemented.