Big O Tires franchise
A franchisee operates a Big O Tires retail store that sells and installs tires and provides related automotive products and services, buying Big O brand tires and most inventory through the franchisor's distribution centers.
Manager-run permitted Disclosed
- Source
- 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise)
- Document
- FDD 2026, issued 2026-06-29
- Item
- Item 15
- Page
- PDF p. 78
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 642017
Item 15 says the store will be operated by the Operator or by a Manager the franchisee employs, both subject to Big O's approval and to completing required training. If the franchisee is an entity, Big O does not require the Operator or Manager to hold an equity interest. The franchisee or a pre-approved representative must attend the first Big O national convention after the store opens. Note that the associate franchise discount in Item 5 does require the buyer to assume full-time active management, and Item 7 Note 9 flags extra training for high-cost or high-volume sites.
What stands out
- Total initial investment of $543,500 to $2,738,000 on a leased site; standard initial franchise fee $17,500, with reductions or waivers disclosed for veterans, first responders, long-service employees and existing franchisees adding stores.
- Royalty runs 3.5% to 5.0% of Adjusted Gross Sales on an annually reset Royalty Matrix, on top of a 4% Local Fund advertising minimum (currently 3.6%) and a 0.9% national marketing fee.
- Item 19 Part A: average annual gross revenues of about $2,821,056 across 454 U.S. franchised stores in calendar 2025, with 41.9% of them above that average.
5 more observations
- Item 19 Part B reports cost data for a self-selected 288 stores: 58.0% gross profit and 6.1% net income from operations as a share of total income, before taxes, debt service and owner compensation.
- Franchised outlets went from 460 to 470 over the three fiscal years to March 31, 2026, a net gain of 10; all 17 company-owned stores were closed in FYE 2024 and none operate now.
- No exclusive territory: Big O commits only to one store per 50,000 people in the Trade Area, a two-mile no-build radius without consent, and a first option on new stores within five miles.
- Big O and its affiliates drew about 89.4% of $386.7 million in consolidated revenue for the year to March 31, 2026 from products and services sold to franchisees.
- Ten-year term with one 10-year renewal; spousal guaranties required; disputes go to mediation and then arbitration in Denver, Colorado.
Things to verify
- Ask for the current Royalty Matrix and the sales thresholds at which the rate drops from 5.0% toward 3.5%, since the matrix resets every year and the schedule is not in the FDD body.
- Request the Item 19 Part A and Part B tables in full, including quartile, median, high and low figures and the number of stores meeting each average — the narrative gives only the overall averages.
- Ask why 177 of the 465 franchised stores were left out of Part B and whether the excluded stores' economics differ from the 288 that reported.
5 more questions
- Confirm the timing and total cost of the POS switch from Navex to AutoLeap, including whether the $469 monthly rate is fixed and what the conversion involves for a store already on Navex.
- Model the real estate decision separately: the Item 7 range assumes a lease at $10,000 to $40,000 a month, while buying land and building is estimated at $1,900,000 to $5,500,000 and triggers higher net worth and liquidity requirements.
- Verify with existing franchisees what the Local Group actually charges, since the Local Fund minimum is 4% and a Local Group may raise it.
- Understand the 700 tire unit minimum inventory requirement and how carrying costs behave in a slow market, given the cover page warns that failing to maintain it can lead to termination.
- Check what the spousal guaranty means for personal assets, and how the Colorado arbitration venue affects the cost of any dispute.
Category cost placeholders, not a forecast. This snapshot uses the default inputs; the calculator below updates when you edit them.
Evidence confidence: High. This describes source support, not investment quality. AI-extracted and machine-verified where stated; no human line-by-line review. Source and review record.
Read the full research overview
A Big O Tires franchisee runs a retail tire store of roughly 4,000 to 10,000 square feet that sells and installs tires and performs related automotive service, buying Big O brand tires and most other inventory through the franchisor's distribution centres. The franchisor, Big O Tires, LLC, is a Nevada company based in Palm Beach Gardens, Florida, and sits under TBC Corporation. New franchises are sold only as Business Format Franchises; an older Product Distribution model is being wound down and accounted for 21 of the 470 franchised stores at March 31, 2026.
Item 7 puts the total initial investment at $543,500 to $2,738,000 for a leased site, with the standard initial franchise fee at $17,500 and up to twelve months of additional funds included. Buying land and building instead would cost an estimated $1,900,000 to $5,500,000 in place of rent. Continuing fees are a royalty of 3.5% to 5.0% of Adjusted Gross Sales set by an annually updated Royalty Matrix, a Local Fund advertising contribution with a 4% minimum currently reduced to 3.6%, a national marketing fee of 0.9% capped at 1%, and POS subscription fees of $295 a month moving to $469 as the system converts to a new supplier. Stated financial qualifications are $100,000 liquid and $300,000 net worth, rising to $150,000 and $500,000 for high-cost real estate projects.
Item 19 does make a financial performance representation, in two parts. Part A reports average annual gross revenues of about $2,821,056 for 454 U.S. franchised stores in calendar 2025, with 190 of them (41.9%) above that average. Part B reports, for a narrower 288 stores that supplied usable expense data, average total income of about $2,914,184 with gross profit at 58.0%, labour at 27.0%, total operating expenses at 51.9% and net income from operations at 6.1% of income before any taxes. The quartile, median, high and low figures the FDD says appear in its Item 19 tables could not be read from the reviewed text extraction, so they are not recorded here.
Item 20 shows a system that has been roughly flat and is now growing modestly: franchised outlets went 460 to 462 to 461 to 470 across the three fiscal years ended March 31, 2026, a net gain of 10, with 33 openings and 21 closures over the period. All 17 company-owned stores were closed in the year ended March 31, 2024 and none have operated since. Transfers to new owners fell from 24 to 19 to 10. Big O projects 29 new franchised openings in the next fiscal year and reports 14 signed agreements for stores not yet open. On the risk side, Item 3 lists no pending litigation but three concluded matters, including two California class actions settled for $2.05 million and $1.84 million, plus one arbitration Big O filed against a former franchisee in November 2025; Item 4 discloses no bankruptcies. The franchise carries no exclusive territory, requires spousal guaranties, and directs disputes to mediation and arbitration in Denver, Colorado.
View ratings and their supporting evidence
Transparent ratings
How these are computedEach dimension is scored 1–5 from published formulas. Missing data yields “Not enough evidence to rate”, never a low score. There is no composite score by design.
How the system has performed, computed from the disclosed Items 7, 19 and 20. Figures a documented material source inconsistency puts in doubt are excluded, and the dimension shows “Not rated”.
Inputs
- Franchised outlets 460 → 470 (Item 20, Table 3)
- Thresholds: ≥15% → 5; 5–15% → 4; 0–5% → 3; −5–0% → 2; below −5% → 1
Inputs
- Attrition = (terminations + non-renewals + reacquisitions + ceased-other) ÷ start-of-year franchised units, averaged over 3 fiscal years
- Thresholds: <2% → 5; 2–4% → 4; 4–6% → 3; 6–10% → 2; >10% → 1
Inputs
- AUV $2,821,056 (disclosed) ÷ midpoint investment $1,640,750 = 1.72×
- Thresholds: ≥2.0 → 5; 1.5–2.0 → 4; 1.0–1.5 → 3; 0.7–1.0 → 2; <0.7 → 1
How much this brand’s FDD discloses, and how well-supported our data on it is. This measures transparency, not business performance — a strong business that discloses little scores low here and stays unrated above.
Inputs
- Item 19 present (+1)
- Population 98% of franchised units, clearly described (+1)
- Cost or profit data disclosed (+1)
- Multi-year or cohort data (+1)
- Franchisor Track Record
- Franchising 46 years (since 1980) · 470 outlets · Item 3: 4 matter(s) disclosed · Item 4: none disclosed
- Multi-Unit Scalability
- Existing franchisees who sign an additional Franchise Agreement by June 30, 2027 and open by June 30, 2028 pay a $10,000 initial fee under the Additional Sto… · Manager-run permitted
- Operational Intensity
- Manager-run permitted
Initial investment
FDD Items 5 and 7Format shown: Business Format Franchise store on leased premises (standard single unit)
$543,500–$2,738,000 total initial investment. Excludes real estate purchase. Includes 12 months of additional funds.
View full investment breakdown — Items 5 & 7
| Initial franchise fee (the named Item 5 fee only) | $17,500 Disclosed
Standard fee for a new franchisee. Numerous discount/incentive/waiver programs (veteran, associate, additional-store development, multi-store conversion) reduce this fee for qualifying franchisees but are not the standard rate, per instructions. |
|---|---|
| Other required initial payments to the franchisor (Item 5) |
|
| Total Item 5 payments to franchisor/affiliates | $328,000 Derived
$1,271,000 Derived
|
| Total initial investment — low | $543,500 Disclosed
Same figure appears on the FDD cover page. |
| Total initial investment — high | $2,738,000 Disclosed
Same figure appears on the FDD cover page. The cover adds that between $417,000 and $2,451,500 of the total must be paid to Big O or its affiliates. |
| Midpoint of range | $1,640,750 Derived
|
| Real estate purchase included? | No — assumes a leased site |
| Additional funds assumed | 12 months |
| Required liquid capital | $100,000 Disclosed
Liquid assets (cash and cash equivalents) of $100,000 or more when leasing an existing or new store. For a high real-estate-cost project (purchased real estate of $4,500,000 or more, or lease payments of $40,000 or more per month) the stated requirement rises to $150,000. |
| Required net worth | $300,000 Disclosed
Net worth of $300,000 or more when leasing an existing or new store; $500,000 or more for a high real-estate-cost project, at Big O's discretion. |
The Item 7 table assumes a leased facility of roughly 4,000 to 10,000 square feet (prototype 7,253 square feet) and includes three months' rent plus a security deposit. It does not include buying land or constructing a building: Item 7 Note 3 states that combined land and building construction costs may range from $1,900,000 to $5,500,000, which would replace the rent line and add financing and acquisition costs. Additional funds cover up to twelve months of operating shortfalls. Big O states it does not offer financing directly or indirectly for any part of the initial investment except in the limited situations described in Item 10.
Item 7 line items (12)
| Expenditure | Low | High |
|---|---|---|
| Initial franchise fee / minimum deposit — Standard fee is $17,500; $10,000 is the minimum deposit payable even under an incentive. | $10,000 | $17,500 |
| Initial training — fees, travel and lodging — Training for one person is included in the initial fee; travel and living costs are the franchisee's. | $1,000 | $9,000 |
| Real estate leases (three months' rent plus security deposit) — Assumes a leased site; base rent estimated at $10,000–$40,000 per month. | $40,000 | $160,000 |
| Equipment, fixtures and other fixed assets — Low end assumes used or refurbished equipment. | $250,000 | $395,000 |
| Construction, remodeling, leasehold improvements and decorating — Excludes new construction, which is discussed separately in Note 3. | $25,000 | $1,500,000 |
| Signs | $15,000 | $100,000 |
| Grand opening advertising | $10,000 | $50,000 |
| Initial inventory — Tires and other products, largely purchased from Big O. | $107,000 | $268,000 |
| Insurance and other security (3 months) | $10,000 | $20,000 |
| Computer hardware and software — Of this, $10,000–$11,000 is paid to Big O for the BOT POS system. | $20,500 | $33,500 |
| Non-recurring pre-opening costs — Utility deposits, licences, loan origination and bank fees. | $5,000 | $35,000 |
| Additional funds (up to 12 months) — Pre-opening expenses plus operating shortfalls, including payroll, for the first twelve months. | $50,000 | $150,000 |
Source for every row: the Item 7 estimated-initial-investment table of 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise) (table begins PDF p. 36) — rows inherit the table's citation rather than carrying fifteen identical ones.
Ongoing fees
FDD Item 6Royalty
3.5%–5% (see basis) Disclosed
- Source
- 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise)
- Document
- FDD 2026, issued 2026-06-29
- Item
- Item 6
- Page
- PDF p. 20
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 642017
generally the maximum Royalty Rate will not exceed 5.0% and the lowest royalty rate will not be less than 3.5%
The rate applies to Adjusted Gross Sales and is set by an annually updated Royalty Matrix based on the store's sales for the year; for new stores the current matrix runs from 3.5% to 5.0%, and the rate generally starts at 5.0% from opening through the end of that calendar year. A flat 2% applies to sales to National Account and Key Account customers, to the sale price of Farm Class tires and to Excess Service Department Sales. Incentive programs described in Item 5 temporarily cut the rate to between 0% and 3% for the first one to three years. Multi-store royalty groups may qualify for lower rates at lower per-store sales.
Brand advertising fund
0.9%–1% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise)
- Document
- FDD 2026, issued 2026-06-29
- Item
- Item 6
- Page
- PDF p. 20
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 642017
National Marketing Fee, currently 0.9% of each month's Gross Sales, raised from 0.25% while certain marketing programs are in effect. It may rise only 0.1% in any 12-month period up to a maximum of 1% of Gross Sales unless the Franchise Advisory Council consents to a faster increase.
Local marketing
3.6%–4% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise)
- Document
- FDD 2026, issued 2026-06-29
- Item
- Item 6
- Page
- PDF p. 20
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 642017
The Local Fund contribution is a minimum of 4% of each month's Gross Sales, currently reduced to a minimum of 3.6% under certain marketing programs. It is payable to the franchisee's Local Group or to Big O as Big O directs. A Local Group may raise the rate above 4% but may not go below 4% except by agreement with Big O. A 2% rate may apply to National and Key Account sales and Farm Class tire sales. Annual contributions from one store are capped at 4% of the greater of $2.7 million or twice an approximation of system-wide average store sales.
Core requirements shown separately; caps, credits and conditions may overlap. Check the full schedule for technology, cooperative, transfer and other charges.
View all recurring fees and conditions
| Royalty | 3.5%–5% (see basis) Disclosed
The rate applies to Adjusted Gross Sales and is set by an annually updated Royalty Matrix based on the store's sales for the year; for new stores the current matrix runs from 3.5% to 5.0%, and the rate generally starts at 5.0% from opening through the end of that calendar year. A flat 2% applies to sales to National Account and Key Account customers, to the sale price of Farm Class tires and to Excess Service Department Sales. Incentive programs described in Item 5 temporarily cut the rate to between 0% and 3% for the first one to three years. Multi-store royalty groups may qualify for lower rates at lower per-store sales. The rate applies to Adjusted Gross Sales and is set by an annually updated Royalty Matrix based on the store's sales for the year; for new stores the current matrix runs from 3.5% to 5.0%, and the rate generally starts at 5.0% from opening through the end of that calendar year. A flat 2% applies to sales to National Account and Key Account customers, to the sale price of Farm Class tires and to Excess Service Department Sales. Incentive programs described in Item 5 temporarily cut the rate to between 0% and 3% for the first one to three years. Multi-store royalty groups may qualify for lower rates at lower per-store sales. |
|---|---|
| Advertising / brand fund | 0.9%–1% of gross sales Disclosed
National Marketing Fee, currently 0.9% of each month's Gross Sales, raised from 0.25% while certain marketing programs are in effect. It may rise only 0.1% in any 12-month period up to a maximum of 1% of Gross Sales unless the Franchise Advisory Council consents to a faster increase. National Marketing Fee, currently 0.9% of each month's Gross Sales, raised from 0.25% while certain marketing programs are in effect. It may rise only 0.1% in any 12-month period up to a maximum of 1% of Gross Sales unless the Franchise Advisory Council consents to a faster increase. |
| Required local marketing | 3.6%–4% of gross sales Disclosed
The Local Fund contribution is a minimum of 4% of each month's Gross Sales, currently reduced to a minimum of 3.6% under certain marketing programs. It is payable to the franchisee's Local Group or to Big O as Big O directs. A Local Group may raise the rate above 4% but may not go below 4% except by agreement with Big O. A 2% rate may apply to National and Key Account sales and Farm Class tire sales. Annual contributions from one store are capped at 4% of the greater of $2.7 million or twice an approximation of system-wide average store sales. The Local Fund contribution is a minimum of 4% of each month's Gross Sales, currently reduced to a minimum of 3.6% under certain marketing programs. It is payable to the franchisee's Local Group or to Big O as Big O directs. A Local Group may raise the rate above 4% but may not go below 4% except by agreement with Big O. A 2% rate may apply to National and Key Account sales and Farm Class tire sales. Annual contributions from one store are capped at 4% of the greater of $2.7 million or twice an approximation of system-wide average store sales. |
| Technology / software | $295–$469/month Disclosed
Franchisees must use the BOT POS system. The current Navex subscription is $295 per month; Big O is transitioning the system to AutoLeap at $469 per month, which it expects to complete within 12 to 18 months of the FDD date. One-time Navex fees are a $1,248 licence fee, $1,800 installation, $600 conversion and $6,400–$7,500 for store training, set-up and go-live support; AutoLeap one-time fees are $250 implementation and $250 data conversion. Big O retains $25 of each monthly subscription. An optional QuickBooks integration adds $2,500–$2,800 per year plus set-up fees. Franchisees must use the BOT POS system. The current Navex subscription is $295 per month; Big O is transitioning the system to AutoLeap at $469 per month, which it expects to complete within 12 to 18 months of the FDD date. One-time Navex fees are a $1,248 licence fee, $1,800 installation, $600 conversion and $6,400–$7,500 for store training, set-up and go-live support; AutoLeap one-time fees are $250 implementation and $250 data conversion. Big O retains $25 of each monthly subscription. An optional QuickBooks integration adds $2,500–$2,800 per year plus set-up fees. |
| Transfer fee | $5,000 one-time Disclosed
$5,000 on a transfer involving assignment of the Franchise Agreement or a change in control; $1,500 if it involves neither. Transferee training fees and costs are extra, and at Big O's discretion the transferor must also repay initial-fee discounts if the transfer occurs within two years of signing. A separate $5,000 resale fee applies if Big O provides the buyer, and a $240 Navex transfer fee applies to the POS licence. $5,000 on a transfer involving assignment of the Franchise Agreement or a change in control; $1,500 if it involves neither. Transferee training fees and costs are extra, and at Big O's discretion the transferor must also repay initial-fee discounts if the transfer occurs within two years of signing. A separate $5,000 resale fee applies if Big O provides the buyer, and a $240 Navex transfer fee applies to the POS licence. |
| Renewal fee | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise); we do not fill gaps with estimates or third-party figures. No initial franchise fee is charged for a successor term. Instead a successor franchise administration fee is calculated as Big O's processing time multiplied by its hourly rate, currently $200 per hour and subject to increase up to $500 per hour. The FDD does not disclose a total amount or an estimated number of hours, so no figure is recorded. |
| Royalty + ad fund (% of sales) | Not comparable — ad fund 0.9%; the other fee is not a percent of sales Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise); we do not fill gaps with estimates or third-party figures. |
Fee schedule (44 fees; 41 verified against the source, 3 single-pass)
Every recurring, conditional and one-time fee found in this FDD's Item 6 table (plus mandatory recurring costs disclosed in Items 7/11), each cited to its page and carrying its verification status: verified means two independent readings agreed or a tie-break re-inspection of the page decided it; single-pass means one reading captured it and it has not been independently confirmed (permitted only for fees that cannot move modeled economics — see the materiality rule). Amounts marked “not stated” are charged at then-current rates the FDD does not quantify and are never modeled as $0.
| Fee | Amount | Frequency | Mandatory | Verification | Cite | Notes |
|---|---|---|---|---|---|---|
| Royalty | Tiered (base 5%) | monthly | Yes | verified (2-pass) | Item 6, p. 20 | Reduced during various incentive programs (Item 5): 0%-3% for years 1-3 depending on program. Calculator audit 2026-09-03: The tiers array carries three values (5, 3.5, 2) with no threshold_low/threshold_high, so src/lib/economics.ts's isBanded check is false and tieredAmount() falls back to a FLAT rate from the top-level `value` field (previously 3.5, the best-case floor) applied to 100% of revenue for every scenario - silently understating royalty for any Store that has not cleared the undisclosed AGS rebate threshold, which based on the disclosed $1.47M minimum is most Stores. 5.0% is the defensible, unconditionally-disclosed ceiling; calc_method='unresolved' documents that the Matrix's actual banding is not established from the FDD (this field is inert while isBanded is false, since the tiers array itself cannot be populated with real thresholds from allowed fix fields, but it correctly records the audit finding for any future data pass that does add real thresholds). (p. 31; |
| "Local Fund" for advertising and related expenditures | 3.6%–4% of gross sales | monthly | Yes | verified (2-pass) | Item 6, p. 20 | 2% rate applies on sales to National/Key Account Customers and Farm Class Tire sales. |
| National Marketing Fee | 0.9%–1% of gross sales | monthly | Yes | verified (tie-break) | Item 6, p. 20 | Payable by the 17th day of the following month; the 0.65% increase is tied to marketing programs that may be changed or terminated. Base is Gross Sales (not Adjusted Gross Sales). Note 3(c) reduced the Local Fund minimum by 0.4% to partly offset this increase, but the two funds remain separate payments. |
| National Auto Service Warranty and Roadside Assistance Plan | $75 | monthly | Yes | verified (2-pass) | Item 6, p. 21 | Calculator audit 2026-09-03: Item 11 (PDF p.59) confirms the $75/store/month is paid IN ADDITION to the 0.9% National Marketing Fee (NMP Percentage Fee) into the same National Marketing Program - both mandatory, both separately billed, not one bundled inside the other. overlaps_with='national-marketing-fee' has no computational effect here (fixed_annual entries are always summed regardless of overlaps_with) but is misleading documentation next to a model_note that already correctly says the two are additive; cleared for consistency. (p. 59; "plus such amount per month charged per franchisee to the Big O marketing fund ..") Citation audit 2026-09-04: page corrected 20 -> 21 (value verified on p. 21). |
| Pro-Tec+ Service Contract Administration Fee (TPP Fee) and Consumer Liability Insurance Policy Fee (CLIP Fee) | $1 | per event | No | verified (tie-break) | Item 6, p. 21 | Required in states Big O designates if the franchisee offers any warranty on non-Big O brand tires; optional in other states. Charged per tire as sold, so frequency is per_event rather than 'varies'. |
| Point of Purchase Packages | $1,500 | annual | Yes | verified (2-pass) | Item 6, p. 21 | Calculator audit 2026-09-03: model_treatment=fixed_annual requires a numeric `value` to compute anything (src/lib/economics.ts: 'if (typeof f.value !== "number") { push to undisclosed }'), but value was null while the disclosed $1,500/yr cap sat only in range_high - so despite the model_note's stated intent ('Use the $1,500/year cap as a conservative estimate'), this mandatory, material fee was silently excluded from every computed total rather than modeled at its own disclosed ceiling. (p. 21; "Not more than $1,500 per year, as adjusted each year in accordance with Big O po") |
| Market Reservation Fee | $2,500–$6,000 | one time | No | verified (tie-break) | Item 6, p. 21 | Only if the franchisee wants an option to open another Store; payable on signing a Market Reservation Agreement (Exhibit Q); non-refundable and not credited against the initial franchise fee. |
| Retail Accounting Centers (RAC) Fee | Not stated (min $200/monthly) | monthly | No | verified (2-pass) | Item 6, p. 22 | Currently no RACs are operating; would apply only if Big O establishes one in the franchisee's area and franchisee uses it. |
| National Fleet Accounts Administrative Fees | $1 | varies | No | verified (tie-break) | Item 6, p. 22 | Applies only to sales to designated National Fleet Account Customers. The reserved 3% is a separate fee that is not currently charged, so it is recorded as a maximum, not as a range_high on the current 1.25%. |
| AMRA Motorist Assurance Program Fees and Dues | $1 | annual | Yes | verified (2-pass) | Item 6, p. 23 | Franchisees are required to participate in the Motorist Assurance Program (Item 16). |
| Transfer Fees | Tiered (base $5,000) | one time | No | verified (tie-break) | Item 6, p. 23 | Payable by transferor or transferee before the transfer closes; Big O may also require the transferor to repay initial-fee discounts on transfers within two years of signing. Transferee training fees are additional. |
| Insurance Administrative Surcharge | 10% of other | per event | No | verified (tie-break) | Item 6, p. 23 | Only if the franchisee fails to purchase the required insurance and Big O buys it instead. |
| Interest on Late Payments | 18% of other | per event | No | verified (tie-break) | Item 6, p. 23 | Only on late payments. |
| Successor Franchise Administration Fee | Not stated | one time | Yes | verified (2-pass) | Item 6, p. 24 | Only when signing a Successor Franchise Agreement (each renewal, e.g. every 10 years). |
| Real Estate Rental and Fees | $10,000–$40,000 | monthly | No | verified (tie-break) | Item 7, p. 19 | Applies only where Big O, not a third-party landlord, is the lessor or sublessor. Late payments incur a fee of up to 5% of the amount due plus interest; a security deposit of about one month's rent is due at opening. The Item 6 row (PDF page 24) states no amount and cross-refers to Item 7 Note 3, which is where the $10,000-$40,000 monthly figure is disclosed. |
| Training Fees - additional trainee, classroom portion | $75 | per event | No | verified (tie-break) | Item 11, p. 70 | Only for trainees beyond the first, and for transferee or replacement Operators/Managers. Travel, lodging and living expenses are additional. |
| Training Fees - additional trainee, field training/certification | $500 | per event | No | verified (tie-break) | Item 11, p. 70 | Only for trainees beyond the first; travel, lodging and living expenses are additional. |
| Multi-unit Franchise Management Training Fee | $550 | one time | No | verified (tie-break) | Item 11, p. 72 | Required at Big O's direction when the franchisee opens a second Big O Store. |
| Transferee Training Fee | $5,500 | one time | No | verified (tie-break) | Item 11, p. 72 | Only on a transfer of the Store or of an interest in the franchisee entity, and only where Big O does not waive training. |
| Training Fees (Learning Management System) | $0–$150 | monthly | No | verified (tie-break) | Item 6, p. 25 | Optional online training program; the fee is paid to Big O, which pays the system administrator, and may change with the administrator's charges. |
| National Convention Registration Fees | $499 | annual | No | verified (tie-break) | Item 6, p. 26 | Item 15 requires the franchisee or a pre-approved representative to attend the first national convention after the Store opens; attendance is optional thereafter. Payable to Big O in its discretion; some incentive programs cover lodging and airfare for the first convention. Page corrected to PDF 26 (printed 18); Pass A cited 25. |
| Resale Fee | $5,000 | one time | No | verified (2-pass) | Item 6, p. 25 | Only if the franchisee contracts with Big O in connection with the sale of its franchise and Big O provides the buyer. |
| Navex Software License Agreement -- Monthly Subscription | $295 | monthly | Yes | verified (2-pass) | Item 6, p. 27 | Applies until franchisee converts to AutoLeap. Calculator audit 2026-09-03: Both navex-monthly-subscription and autoleap-monthly-subscription carried model_treatment=fixed_annual; src/lib/economics.ts's fixed_annual branch does not consult overlaps_with at all (only the included_elsewhere branch and the minimum-royalty floor logic do), so despite both entries' own model_note text already saying 'model one, not both,' the engine was summing $295/mo + $469/mo = $9,168/yr of POS subscription cost for a system a Store only ever runs one of at a time. Reclassifying the predecessor (Navex) as included_elsewhere - keeping AutoLeap, the forward-looking steady-state cost - fixes the double count. (p. 33; "those fee that will be paid to our next designated supplier for the BOT POS Syst") |
| Navex Software License Agreement - one-time fees (license, installation, conversion, training) | $10,048–$11,148 | one time | Yes | verified (tie-break) | Item 6, p. 27 | Every franchisee must acquire the BOT POS System and become a Navex (or AutoLeap) licensee. Pass A's range_high of $9,748 did not foot; the four components total $10,048 at the low end and $11,148 at the high end, which is what Item 7 Note 7 corroborates. |
| Navex Software License Agreement - Transfer Fee | $240 | one time | No | verified (tie-break) | Item 6, p. 27 | Only on a Store transfer. |
| AutoLeap Shop Management System - Monthly Subscription | $469 | monthly | Yes | verified (tie-break) | Item 6, p. 27 | Applies once the Store converts from Navex to AutoLeap; Big O expects the system-wide conversion within 12-18 months of the issuance date. |
| AutoLeap - Implementation and Data Conversion Fees | $500 | one time | Yes | verified (tie-break) | Item 6, p. 27 | Payable on conversion to the AutoLeap BOT POS System. |
| QuickBooks Online Advanced Edition Subscription | $2,500–$2,800 | annual | No | verified (tie-break) | Item 6, p. 28 | Optional - required only if the franchisee requests integration of its accounting system with the Navex BOT POS System. |
| QuickBooks Integration - one-time training, setup and support fees | $3,880 | one time | No | verified (tie-break) | Item 6, p. 28 | Optional - only with Navex/BOT POS accounting integration. |
| Fees for Miscellaneous Assistance | Not stated | varies | No | verified (2-pass) | Item 6, p. 28 | As Big O determines. |
| Indemnification | Not stated | per event | No | verified (tie-break) | Item 6, p. 28 | Contingent on a liability claim. |
| Costs and Attorneys' Fees | Not stated | per event | No | verified (tie-break) | Item 6, p. 28 | Contingent on non-compliance. |
| Audit fees | Not stated | per event | No | verified (tie-break) | Item 6, p. 29 | Payable if an audit shows Gross Sales understated by more than 2%, if the franchisee obstructs or fails to cooperate with the audit, or if Big O audits because required quarterly financial statements were not provided. |
| Noncompliance Service Charge | $500 | per event | No | verified (tie-break) | Item 6, p. 29 | Imposed at Big O's option, in addition to its other rights and remedies. |
| Bond | Not stated | varies | No | verified (2-pass) | Item 6, p. 29 | At Local Group's discretion, for new or non-compliant franchisees. |
| Rebill Charge | $3 | per event | No | verified (tie-break) | Item 6, p. 29 | Applies only to tires bought direct and rebilled through Big O; may be increased or decreased by Big O after consulting the Franchise Advisory Council. |
| Interest (on Big O financing/loans) | Not stated | varies | No | verified (2-pass) | Item 6, p. 30 | Only if franchisee takes Big O financing. |
| Product Transfer Payment | Not stated | monthly | No | verified (2-pass) | Item 6, p. 30 | Only if a BFF Store wholesales Program Products to non-permitted customers. |
| Regional Funding Plan Fee | $0 | per event | No | verified (tie-break) | Item 6, p. 30 | Imposed only on franchisees in regions that have adopted a Regional Funding Plan. Big O may add an administrative fee for collecting the contributions but currently does not. Item 11 (PDF page 63) says Regional Funds are used for cooperative events and activities such as sports events, franchisee meetings and retreats, regional training and charity events - not advertising. |
| Manual Processing Fees | $75 | per event | No | single-pass | Item 6, p. 30 | Assessed for failure to comply with automated administrative requirements (e.g., electronic royalty reporting). [Listed by one verification pass only (A); not independently confirmed.] |
| Products and Services | Not stated | varies | Yes | verified (tie-break) | Item 6, p. 26 | Page corrected to PDF 26 (printed 18); Pass A cited 25. |
| Royalty on National/Key Account, Farm Class Tire and Excess Service Department Sales | 2% of other | monthly | Yes | verified (tie-break) | Item 6, p. 20 | Applies only to the carved-out categories that are excluded from Adjusted Gross Sales; 'Excess Service Department Sales' means service department sales above 40% of Gross Sales, measured monthly. Calculator audit 2026-09-03: This entry, not the main royalty, is what makes scheduleModelable() return not-offerable: category=royalty, mandatory=true, amount_type=percent, basis=other (not in SALES_BASES), model_treatment=requires_assumption trips the nonSales check (economics.ts lines 358-362) and disables the whole brand's calculator over a rate that applies to $0 of revenue for a typical franchisee. excluded_immaterial removes it from that trapped model_treatment set while still being listed for the reader. (p. 20; "2% of Gross Sales to National Account Customers and Key Account Customers ... 2%") |
| Grand Opening Advertising | $10,000–$50,000 (min $10,000) | one time | Yes | single-pass | Item 11, p. 62 | Required of every new Store. Incentive programs match 50% of each dollar up to $20,000 as a trade-account credit. [Listed by one verification pass only (B); not independently confirmed.] |
| Interest (on Big O loans and advances) | Not stated | varies | No | single-pass | Item 6, p. 30 | Only for franchisees who take Big O financing (e.g., up to $100,000 of tire inventory financing, or the $150,000 trade-account loan under the Additional Store Development Program). [Listed by one verification pass only (B); not independently confirmed.] |
Other fees disclosed in Item 6 include an insurance administrative surcharge of 10% of the cost of insurance Big O buys if the franchisee fails to, interest on late payments at the lesser of 18% per year or the legal maximum, audit costs if reported Gross Sales are understated by more than 2%, manual processing fees up to $75 per occurrence, a market reservation fee of $2,500–$6,000 for an option on an additional market, a bond set by the Local Group, and a product transfer payment if a Business Format store wholesales Big O program products to non-permitted customers.
Financial performance (Item 19)
What the franchisor actually disclosedWho is represented: Two overlapping populations of U.S. franchised stores for calendar 2025, with no company-owned outlets (there were none). Part A covers 454 stores that had operated at least 12 consecutive months as of December 31, 2025 and reported gross revenues for every month of 2025 — 97.6% of the 465 franchised U.S. stores open at year end, made up of 24 Product Distribution Franchise stores and 430 Business Format Franchise stores. Part B covers the 288 stores (61.9% of the 465) that also submitted expense data Big O considered reliable and were under the same ownership for the whole year. Nine stores closed during 2025 and none of them had been open less than 12 months.
Qualifications: The measurement period is calendar 2025, which does not line up with Big O's March 31 fiscal year used in Item 20. Part A excludes 11 of the 465 franchised U.S. stores open at year end, and Part B excludes 177 of them because the data was incomplete, unreliable, or the store changed hands during the year — so the cost and profit figures rest on a self-selected 61.9% of the system. Both populations mix Product Distribution and Business Format stores; new franchises are only sold as Business Format stores. Big O states the sales data comes from franchisee royalty reports and the expense data from franchisee-submitted financials, and the FDD does not describe them as audited. Net income from operations excludes all taxes. The quartile, median, high and low figures the FDD says are in the Part A and Part B tables could not be read from the reviewed text extraction.
View full Item 19 disclosure and tables
Big O makes a two-part historical financial performance representation for calendar 2025. Part A reports average annual gross revenues of about $2.82 million across 454 U.S. franchised stores, and states that 190 of them, or 41.9%, exceeded that average — meaning most reporting stores fell below it. Part B reports averages for a smaller set of 288 stores that supplied expense data: total income of about $2.91 million, gross profit at 58.0% of income, labour at 27.0%, total operating expenses at 51.9% and net income from operations at 6.1% of income. These are system averages before taxes, debt service and owner compensation, not a projection of what any single store will earn, and the Part B group is a self-selected 61.9% of the franchised system.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Average annual gross revenues — all Part A Reporting Stores 41.9% of units met or exceeded Disclosed as $2,821,056.22. | 454 U.S. franchised stores open 12+ months reporting all of 2025 Average | $2,821,056 | 454 | CY2025 | FDD p.86 |
| Part A Reporting Stores that exceeded the overall average gross revenues 41.9% of units met or exceeded 58.1% of the reporting stores were below the average. | 454 U.S. franchised stores open 12+ months reporting all of 2025 Count | 190 | 454 | CY2025 | FDD p.86 |
| Average total income — all Part B Reporting Stores Part B uses a narrower, self-selected population than Part A, which is why its average is higher. | 288 U.S. franchised stores with reliable expense data and unchanged ownership through 2025 Average | $2,914,184 | 288 | CY2025 | FDD p.87 |
| Cost of goods sold as a share of total income — Part B average Cost of products for resale; excludes labour. | 288 Part B Reporting Stores Average | 42% | 288 | CY2025 | FDD p.87 |
| Total labour as a share of total income — Part B average Technician and manager wages, sales associates, payroll taxes, fringe benefits and workers' compensation. | 288 Part B Reporting Stores Average | 27% | 288 | CY2025 | FDD p.87 |
| Total operating expense as a share of total income — Part B average Labour, royalty, advertising, occupancy, utilities and other expenses. Excludes all taxes. | 288 Part B Reporting Stores Average | 51.9% | 288 | CY2025 | FDD p.87 |
Disclosed cost and profit figures
These figures are disclosed by the franchisor for the population stated in each row — often a subset (company-owned units, or franchisees who chose to report). They frequently exclude owner compensation, rent, debt service, taxes or royalties. They are not a prediction of your results.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Gross profit margin — Part B average Total income less cost of goods sold, as a percentage of total income. | 288 Part B Reporting Stores Average | 58% | 288 | CY2025 | FDD p.87 |
| Net income from operations as a share of total income — Part B average Gross profit less the listed operating expenses. Big O states the figures exclude sales, payroll and income taxes, and they do not reflect debt service, owner compensation or depreciation line items beyond those listed. | 288 Part B Reporting Stores Average | 6.1% | 288 | CY2025 | FDD p.87 |
System health (Item 20)
Outlets, openings, exits and transfers by fiscal year · U.S. onlyView detailed Item 20 tables and source notes
| Fiscal year | Start | Opened | Terminated | Not renewed | Reacquired | Ceased — other | End | Transfers | Company-owned (end) |
|---|---|---|---|---|---|---|---|---|---|
| 2024 | 460 | 10 | 6 | 2 | 0 | 0 | 462 | 24 | 0 |
| 2025 | 462 | 8 | 4 | 2 | 0 | 3 | 461 | 19 | 0 |
| 2026 | 461 | 15 | 0 | 3 | 0 | 3 | 470 | 10 | 0 |
Disclosed 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise), Item 20, Tables 1–3 (PDF p. 90). Fiscal years end March 31. Table 3 foots for all three years. Company-owned outlets went from 17 to zero during FYE March 31, 2024, when all 17 (14 of them in Minnesota) were closed rather than sold to franchisees. Franchised outlets moved 460 to 462 to 461 to 470 over the three years, a net gain of 10, with FYE 2026 the strongest year: 15 openings, no terminations, 3 non-renewals and 3 other closures. Transfers to new owners fell from 24 to 19 to 10. Item 20 also discloses that some franchisees signed confidentiality clauses during the last three fiscal years that may limit what they can say about their experience. A separate Table 3 note shows Business Format stores growing from 434 to 449 over the same period as the Product Distribution model is wound down.
Source data notes (11) — inconsistencies found in the FDD itself during verification
Our verification re-reads every table. Where the FDD's own printed tables disagree, we document the discrepancy rather than silently "fixing" it. Classes: B = arithmetic error in the source's derived column; C = the printed tables genuinely disagree; D = a legitimate definitional difference (e.g., transfers netted, explained by a footnote); E = unresolved ambiguity. Figures a material C/E issue puts in doubt are excluded from our derived metrics, scores and rankings.
- [D/minor] Table 1 2024: Total outlets fall 477 -> 462 in FYE 3/31/2024 (net -15) while franchised outlets rise 460 -> 462 (net +2), because the entire 17-store company-owned estate left the system in that year. — Verified and internally consistent: Table 1 start 477 = 460 franchised + 17 company-owned; Table 4 Totals show 17 company-owned outlets at start, 17 'Outlets Closed', 0 'Outlets Sold to Franchisee' and 0 at end; Table 3 shows 0 reacquisitions. A definitional difference, not an error - total-outlet growth and franchised-outlet growth point in opposite directions for FY2024, so any growth metric must state which base it uses.
- [D/minor] Table 3 2026: Pass B's observation that the Table 3 TOTAL rows foot in all three years. — Re-footed independently on the Table 3 Totals row at PDF page 96: FY2024 460+10-6-2-0-0=462; FY2025 462+8-4-2-0-3=461; FY2026 461+15-0-3-0-3=470. The state rows also sum to the printed totals (FY2024 starts 460, FY2024 ends 462, FY2026 ends 470) and each year's start equals the prior year's end. No discrepancy.
- [D/minor] Table 1 vs Table 3 2026: Pass B's observation that Table 3 reconciles with Table 1's franchised row (460/462, 462/461, 461/470). — Confirmed - Table 1's franchised start/end figures equal the Table 3 Totals row in all three years, so the totals the site uses are corroborated twice. No discrepancy.
- [D/minor] Table 3 footnote (1) 2026: Pass B's observation on the BFF sub-table totalling 449 at FYE 3/31/2026. — Confirmed on PDF page 100: BFF totals 434->438, 438->437, 437->449, and 449 + 21 PDF Stores = 470, matching Table 1 footnote (2) and Item 1's '449 Stores ... operate as Business Format Franchises'. A definitional split (PDF vs BFF) within a corroborated total, not an inconsistency.
- [D/minor] Table 5 2026: The note under Table 5 says 'New franchised outlets projected includes Company-Owned outlets sold to franchisees' although Big O has had no company-owned outlets since FYE 3/31/2024. — Boilerplate that cannot apply: Table 4 shows 0 company-owned outlets in FY2025 and FY2026 and Column 4 of Table 5 projects 0 company-owned openings, so the note adds nothing to the 29 projected franchised openings. Harmless definitional leftover.
- [D/minor] Table 5 2026: Pass B's observation that Table 5 columns foot (14 signed-not-open, 29 projected) and that Illinois appears with no Table 3 outlets. — Re-added on PDF pages 101-102: signed-but-not-open sums to 14 and projected new franchised outlets to 29 across the 16 listed states, matching the printed Total row. Illinois having 1 signed agreement and 1 projected opening with no existing outlets is a new-state entry, not an inconsistency.
- [D/minor] Table 2 2026: Pass B's observation that transfers are high relative to system size and falling sharply: 24, 19 then 10. — Totals verified against the printed Total row on PDF page 92 and the state rows sum to them. This is a substantive trend, not a data defect; Table 2 counts transfers to new owners other than the franchisor and is therefore not expected to tie to the Table 3 movement columns.
- [D/minor] Item 19 vs Item 20 2025: Item 19 counts 465 U.S. franchised Stores as of December 31, 2025 and '9 Stores closed during 2025', which ties to no Item 20 fiscal-year figure (461 at 3/31/2025, 470 at 3/31/2026). — Legitimate definitional difference: Item 19 is stated on a calendar-year basis and Item 20 on fiscal years ended March 31, so the populations are not comparable and neither corroborates nor contradicts the other. The Item 20 totals remain corroborated by Table 1 and Item 1.
- [D/minor] Item 20 (all tables) 2026: Pass B's observation that all Item 20 tables are U.S.-only, with no international outlets or separate international table. — Confirmed - Item 20 discloses only U.S. states, so no U.S./international split had to be applied to the TOTAL rows.
- [D/minor] Table 3 2026: Pass B's concentration observation: California (90), Arizona (74), Colorado (70) and Utah (52) dominate, and California is the only state with 'Ceased Operations - Other' exits in FY2026 (3 of 3). — Verified against the state rows: FY2026 openings 15 (Arizona 7), non-renewals 3 (California 2, Idaho 1) and ceased-other 3 (all California). Descriptive, not a discrepancy.
- [D/minor] Table 4 2024: Pass B's observation that all 17 company-owned exits are booked as 'Outlets Closed' with 0 sold to franchisees and 0 reacquisitions in Table 3. — Confirmed on Table 4 at PDF page 101: Iowa 1, Kansas 1, Minnesota 14 and Missouri 1 all closed in FY2024. The company stores left the system rather than being refranchised, which is consistent with Table 3 showing no reacquisitions and franchised counts unaffected.
Company-owned outlets (Table 4)
| Year | Start | Opened | Reacquired from franchisee | Closed | Sold to franchisee | End |
|---|---|---|---|---|---|---|
| 2024 | 17 | 0 | 0 | 17 | 0 | 0 |
| 2025 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2026 | 0 | 0 | 0 | 0 | 0 | 0 |
Read: How to read Item 20.
Ownership and operations
Items 11, 12, 15, 17Manager-run permitted Disclosed
- Source
- 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise)
- Document
- FDD 2026, issued 2026-06-29
- Item
- Item 15
- Page
- PDF p. 78
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 642017
Item 15 says the store will be operated by the Operator or by a Manager the franchisee employs, both subject to Big O's approval and to completing required training. If the franchisee is an entity, Big O does not require the Operator or Manager to hold an equity interest. The franchisee or a pre-approved representative must attend the first Big O national convention after the store opens. Note that the associate franchise discount in Item 5 does require the buyer to assume full-time active management, and Item 7 Note 9 flags extra training for high-cost or high-volume sites.
View operating requirements, territory and contract term
| Owner involvement (Item 15) | Manager-run permitted Disclosed
Item 15 says the store will be operated by the Operator or by a Manager the franchisee employs, both subject to Big O's approval and to completing required training. If the franchisee is an entity, Big O does not require the Operator or Manager to hold an equity interest. The franchisee or a pre-approved representative must attend the first Big O national convention after the store opens. Note that the associate franchise discount in Item 5 does require the buyer to assume full-time active management, and Item 7 Note 9 flags extra training for high-cost or high-volume sites. Item 15 says the store will be operated by the Operator or by a Manager the franchisee employs, both subject to Big O's approval and to completing required training. If the franchisee is an entity, Big O does not require the Operator or Manager to hold an equity interest. The franchisee or a pre-approved representative must attend the first Big O national convention after the store opens. Note that the associate franchise discount in Item 5 does require the buyer to assume full-time active management, and Item 7 Note 9 flags extra training for high-cost or high-volume sites. |
|---|---|
| Initial training | Initial training is provided for one person and currently runs to roughly one or two days of online training, one and a half weeks of facilitated training, three and a half weeks of required field training and two weeks of optional field training. Facilitated training is held at Big O's Palm Beach Gardens, Florida facility, in a virtual classroom or at another location Big O designates; field training and certification take place at a Big O store Big O designates. The franchisee or its Operator must complete the programme before the store opens. Tuition for one person is included in the initial franchise fee; additional trainees cost $75 per person per week for classroom training and $500 per person per week for the mandatory field training and certification, and the franchisee pays all travel and living expenses. Disclosed
Big O sets the number of weeks at its discretion and may waive some or all training for people already trained elsewhere in the system. Additional training may be required for stores with high real estate costs or high past sales. |
| Multi-unit / development options | Existing franchisees who sign an additional Franchise Agreement by June 30, 2027 and open by June 30, 2028 pay a $10,000 initial fee under the Additional Store Development Program, with royalties reduced to 1% in year one and 2% in year two, up to $100,000 of inventory financing and matching funds of up to $20,000 each for opening advertising and for signage, painting and remodelling; an alternative is a $150,000 trade-account loan that is forgiven if the store reaches $4,000,000 of gross sales in its first two years but requires a 20-year term. A franchisee acquiring three or more competitor locations at once for conversion pays $10,000 for the first store and $5,000 for each additional store. Franchisees owning more than one store may apply to form a Multi-Store Royalty Group, which qualifies for lower royalty rates at lower per-store sales. A market reservation fee of $2,500 to $6,000 buys a 12-month option on an additional market. Disclosed
Details drawn from Item 5 (incentive programs), Item 6 Note 2 (multi-store royalty groups) and Item 12 (market reservation). |
| Territory (Item 12) | No exclusive territory: Big O states the franchisee will not receive one and may face competition from other franchisees, from outlets Big O owns and from other channels or competitive brands Big O controls. Instead the agreement sets a density limit and two distance rules. Big O will not operate or license more than one Big O store per 50,000 people in the franchisee's Trade Area; it will not permit another Big O store within a two-mile radius without the franchisee's consent, which cannot be revoked once given; and if a new store is proposed within five miles the franchisee has a first option to acquire it, awarded to the closest qualifying franchisee. Big O may redefine the Trade Area as population changes. The franchisee has the exclusive right to operate from its single location but only a non-exclusive licence to the marks, and other franchisees may sell inside the Trade Area. Internet sales need Big O's written consent and its current policy is not to approve franchisee internet use. Territory and first-option rights lapse during the last 15 months of the term if no successor agreement is signed. Disclosed
|
| Initial term | 10 years Disclosed
A 20-year term is required for franchisees taking the Existing Franchisee Growth financing programme or the alternative financing option under the Additional Store Development Program. |
| Renewal | One additional 10-year term after the initial term. To take it, the franchisee must give notice, show legal control of the premises, sign Big O's then-current Franchise Agreement — which may have materially different terms — refurbish the store, pay a successor franchise administration fee, sign a Successor Franchise Rider containing a general release, and meet compliance standards. The initial franchise fee is waived for a successor term. Big O may agree to a shorter term if the lease or sublease does not run the full length. Disclosed
|
Risk and legal observations
Items 3, 4, 8, 15, 17 — summarized neutrallyLitigation: 4 matter(s) disclosed Disclosed · Bankruptcy: None disclosed Disclosed
View legal disclosures, restrictions and guarantees
| Litigation (Item 3) | 4 matter(s) disclosed Disclosed Item 3 lists no pending litigation. It discloses three concluded matters and one action Big O filed in its last fiscal year. A California consumer class action over Big O's former tire protection programme, alleging it was an unregistered insurance contract, settled for $2.05 million with court approval in August 2018. Coordinated California wage-and-hour class actions brought by employees of Big O company-owned stores, including a nationwide FLSA claim, settled for $1.84 million with final approval in March 2019. A 1993 administrative matter with the San Diego City Attorney over advertising practices ended in a stipulated permanent injunction on advertising disclosure, without any admission, and $35,000 in costs and civil penalties of which Big O paid $25,000. Big O also reports one arbitration it filed in November 2025 against a former franchisee and its owners to enforce post-termination obligations. |
|---|---|
| Bankruptcy (Item 4) | None disclosed Disclosed Item 4 states that no bankruptcy information is required to be disclosed. |
| Personal guaranty | Required Disclosed
If the franchisee is an entity, its Operator and each officer, director, partner, shareholder or member — and their spouses — must sign Big O's standard Guaranty of Franchisee's Agreement; if the franchisee is an individual, that individual's spouse must sign. Big O may limit or waive this at its discretion. The cover page carries a state-required risk warning that a spouse with no ownership interest becomes liable for all financial obligations, putting marital and personal assets at risk. |
| Non-compete | During the term, no involvement in a competing business other than one the franchisee already operates and has identified, subject to state law. After termination or expiry, there is no post-term restriction if the agreement simply expires on its terms without a default by the franchisee; otherwise the franchisee may not operate a competing business for two years within 10 miles of its own store or of any other Big O store that was operating or under construction on the termination date, subject to state law. Disclosed
|
| Transfer restrictions | All transfers of the Franchise Agreement need Big O's prior approval, except certain transfers to a survivor of the franchisee. A transfer includes any pledge or transfer of the agreement, of the right to occupy the premises, or of equity, as well as a change in control, merger, reorganisation or issuance of new securities. Conditions include the transferee qualifying as a new franchisee and showing it can maintain past financial performance, payment of all money owed plus the transfer fee, the transferee completing training, refurbishment of the store, signing Big O's then-current Franchise Agreement and a guaranty, signing a consent to assignment, and the transferee obtaining a surety bond or letter of credit. Big O holds a right of first refusal on any offer, and an option to buy the franchisee's assets on expiry or termination. On death or disability the franchise must be assigned to an approved buyer within six months. Disclosed
|
| Termination / non-renewal | The franchisee may terminate only narrowly: an uncured material breach by Big O after 30 days' notice, inheritance on a spouse's death with election within 12 months, or a premises sale where Big O declines its right of first refusal and the franchisee keeps paying royalties for the remaining term. Big O may terminate without cause only on a force majeure event lasting 15 months or more. Cure periods are short: 5 days for monetary defaults, 7 days for suing in breach of the dispute resolution terms, 10 days for legal non-compliance and 30 days for other breaches and policy violations. Non-curable defaults include abandonment, non-operation for five consecutive business days, materially false reports, unapproved transfer, repeated violations, loss of possession and violation of the in-term non-compete. A default cross-defaults every other agreement with Big O. On termination the franchisee must pay outstanding amounts and, if terminated for its own default, lost future fees, and assign phone numbers, listings, web addresses and social media accounts to Big O. Disclosed
|
| Supplier restrictions (Item 8) | Big O is the only approved supplier of Big O private brand tires and other private brand products, and franchisees must buy Big O trademarked and other brand tires from the distribution centre serving their area. All products, equipment, supplies and services must meet Big O's standards and come from Big O or an approved source, and all trademarked wearables, merchandising materials and signs must come from or through Big O. Franchisees must carry at least 700 tire units, mostly Big O brand or exclusive tires, from 180 days after opening. Big O anticipates purchases from it and its designated sources will be 90% of initial tire inventory and 80% or more of ongoing tire product and supply purchases. Franchisees must use the BOT POS system. For the 12 months ended March 31, 2026 Big O and its affiliates had consolidated revenues of $386,736,759, of which $345,734,196 (about 89.4%) came from products and services sold to franchisees; lease and sublease revenue from franchisees added $9,892,678 (about 2.6%). Big O also takes 1% to 10% of the purchase price on franchisee purchases from certain designated sources, and 1% to 3% rebates from some suppliers. Disclosed
|
| Dispute resolution | Except for certain claims, the parties must first mediate. If mediation fails, disputes must be arbitrated in Denver, Colorado, subject to state law, and where a claim can be brought in court both sides waive a jury trial. Choice of forum and choice of law are Colorado, subject to state law; leases and subleases use the law and courts of the state where the premises are located. The cover page carries a state-required risk warning that out-of-state dispute resolution may raise costs and pressure a franchisee toward a less favourable settlement. Disclosed
|
- The cover page carries three state-required risk warnings: out-of-state dispute resolution in Colorado, spousal liability under the guaranty, and a requirement to carry an inventory of 700 tire units whose shortfall may result in termination.
- Big O and its affiliates take about 89.4% of their consolidated revenue from sales to franchisees, so the supply relationship is a large part of the economics on both sides.
- Franchisees must participate in Big O's national fleet account programmes and comply with its national fleet account policies.
- Internet and social media use to sell products or display the marks requires Big O's written consent, and Big O's current policy is not to approve franchisee internet use.
- Item 20 discloses that some franchisees signed confidentiality clauses during the last three fiscal years that may limit what they can tell prospective buyers.
- The Local Fund advertising contribution is set and administered by a Local Group the franchisee must join, and the Local Group may raise the rate above the 4% minimum.
- Big O may redefine the Trade Area at its discretion as population changes, and territory and first-option rights lapse during the final 15 months of the term if no successor agreement is signed.
Summaries are neutral paraphrases of the cited document and are not legal advice. Read the full Items in the current FDD and consult a franchise attorney.
Illustrative unit economics
Model estimateModel estimate — not disclosed by the franchisor, not a forecast. Fee lines below come from this brand's verified FDD fee schedule and are computed exactly as disclosed (each line shows its arithmetic). Operating-cost ratios are category placeholders we chose — every one is editable and labeled assumption. Results are illustrative arithmetic, not expected returns. Every figure here belongs to one of five labeled categories — disclosed inputs, model assumptions, unmodeled mandatory fees, user-editable assumptions, and exclusions — defined in our methodology. This brand's Item 19 also discloses some cost or profit data — see the Item 19 section, which takes precedence over any assumption here.
| Line (annual) | Downside | Base | Upside |
|---|---|---|---|
| Revenue (AUV basis) | $2,256,845 | $2,821,056 | $3,244,214 |
| − Cost of goods / supplies assumption | $677,053 | $846,317 | $973,264 |
| − Payroll (excl. owner) assumption | $609,348 | $761,685 | $875,938 |
| − Occupancy assumption | $180,548 | $225,684 | $259,537 |
| − Other operating expenses assumption | $225,684 | $282,106 | $324,421 |
| − Royalty disclosed 5% of revenue (standard rate; conditional/incentive tiers are not auto-activated — the standard rate is modeled) = $141,053 |
$112,842 | $141,053 | $162,211 |
| − "Local Fund" for advertising and related expenditures disclosed 3.6% of gross sales = $101,558 |
$81,246 | $101,558 | $116,792 |
| − National Marketing Fee disclosed 0.9% of gross sales = $25,390 |
$20,312 | $25,390 | $29,198 |
| − National Auto Service Warranty and Roadside Assistance Plan disclosed $75/month × 12 = $900 |
$900 | $900 | $900 |
| − Point of Purchase Packages disclosed $1,500 per year |
$1,500 | $1,500 | $1,500 |
| − AutoLeap Shop Management System - Monthly Subscription disclosed $469/month × 12 = $5,628 |
$5,628 | $5,628 | $5,628 |
| = Modeled operating result before the items below (EBITDA-style) | $341,783 | $429,236 | $494,825 |
| − Manager compensation assumption | $70,000 | $70,000 | $70,000 |
| = Modeled result after manager compensation | $271,783 | $359,236 | $424,825 |
| − Illustrative debt service assumption | $185,971 | $185,971 | $185,971 |
| = Illustrative pre-tax cash flow — before taxes, capital expenditures and unmodeled fees | $85,811 | $173,264 | $238,854 |
| Modeled operating margin | 15.1% | 15.2% | 15.3% |
This modeled result is not owner income. It excludes: income taxes; capital expenditures and equipment-replacement reserves; working-capital needs; ramp-up losses; owner-specific costs; one-time and per-event fees (transfer, renewal, audit); and 1 mandatory fee(s) whose amounts the FDD does not state (listed below — real outflows are higher by these amounts). It is illustrative arithmetic on stated assumptions, not a promise or forecast of what a franchisee earns.
Mandatory fees disclosed but not quantified — not included in the modeled result: the FDD requires these but states no amount (e.g. billed at "then-current" rates). They are never modeled as $0. If you have a quote or estimate, enter an annual amount to include it as your own assumption:
- Successor Franchise Administration Fee (Item 6, p. 24) — Amount depends on Big O's processing time; recurs only at each ~10-year renewal.
Overlap control: Navex Software License Agreement -- Monthly Subscription is counted within “autoleap-monthly-subscription” — excluded to avoid double counting.
Every figure in this table is a model estimate built on the disclosed fee schedule plus labeled assumptions. Excluded: income taxes, owner draw, working-capital swings, capital expenditures, ramp-up losses in year one, one-time and per-event fees (transfer, renewal, audit), and the undisclosed-amount fees listed above. Read AUV vs. EBITDA vs. owner income before using this.
Sources and provenance
Primary source: 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise) · issued 2026-06-29. Find the FDD at Wisconsin Department of Financial Institutions — Franchise Registration Search. We cite source pages and do not redistribute PDFs.
View all sources, provenance and verification notes
| Document | Obtained from | Dates | Status |
|---|---|---|---|
| 2026 Franchise Disclosure Document — Big O Tires, LLC (Business Format Franchise) Registry file 642017 · 484 pages Cover reads 'Date of Issuance: June 29, 2026'. Wisconsin registration effective 6/29/2026, status Registered; this is the newest document available in the registry. The document covers the Business Format Franchise only; Product Distribution Franchises are offered under a separate disclosure document. | Wisconsin Department of Financial Institutions — Franchise Registration Search | Issued 2026-06-29 Retrieved 2026-08-29 | Newest available at retrieval |
AI-assisted extraction from the archived FDD text, independently machine-verified against the cited source (two passes plus tie-break); not human-reviewed. Extracted 2026-08-29. Last updated 2026-09-05. AI-assisted extraction independently machine-verified against the cited source document (2026-08-31): two independent AI reading passes plus tie-break re-inspection of every disagreement; 70 of 73 material fields confirmed (64 with the exact page citation re-confirmed), 1 corrected, 0 unresolved, 3 confirmed not disclosed. No human has reviewed this profile. Fiscal year covered: FY2026 (Mar 31, 2026). See how we use AI and verify data.
Fields flagged as uncertain (4)
- item19.headline_median - the Part A and Part B tables did not appear in the reviewed PDF text layer, so no median, quartile, high or low figure could be read.
- fees.renewal_fee.value - the successor franchise administration fee is disclosed only as processing time times an hourly rate of $200, up to $500; no total is given.
- franchisor.business_since / franchising_since - Item 1 gives 1962 (predecessor formed, dealer agreements), 1980 (predecessor began franchising) and about 1982 (Big O).
- item20.us_only and units.us_only - Item 20 lists only U.S. states and no non-U.S. outlets are disclosed, but the FDD does not state explicitly that the tables are U.S.-only.
Extraction notes (8)
- The Item 19 measurement period is calendar 2025, while Item 20 and the financial statements use a fiscal year ending March 31. The two outlet counts therefore differ: 465 franchised U.S. stores at December 31, 2025 in Item 19 versus 461 at the start and 470 at the end of the fiscal year ended March 31, 2026 in Item 20.
- investment.franchise_fee_low and _high are both set to the standard $17,500 stated in Item 5. The Item 7 row shows $10,000 to $17,500 because $10,000 is the minimum deposit payable even where an incentive reduces the fee; the discount and waiver programs are recorded in the fee notes rather than as a range.
- Item 20 Table No. 3 foots for all three fiscal years and its year-end totals match Table No. 1, so no arithmetic warnings are expected.
- This FDD covers the Business Format Franchise only. Product Distribution Franchises, which still account for 21 of the 470 franchised outlets, are offered under a separate disclosure document and are not described here, although they are included in the Item 19 and Item 20 counts.
- fees.cooperative is omitted: the Local Group functions as the regional advertising cooperative and its required contribution is recorded once, under fees.local_marketing, to avoid double counting. The Local Group's separate Regional Funding Plan fee of $0.25 per tire is listed under fees.other_recurring.
- operations.staffing_note is null because the FDD does not disclose typical headcount or operating hours; the validator does not warn on null values under operations.
- Verification 2026-08-31: correct /fees/royalty {'value': 3.5, 'unit': 'pct_gross_sales', 'range_high': 5} → {'value': 3.5, 'unit': 'pct_other', 'range_high': 5}
- Verification 2026-08-31: fix_page /operations/owner_involvement 77 → 78
We do not host or redistribute FDD PDFs. Search the registry linked above by franchisor name to obtain the document. Found an error? Report a correction with the field and the primary source.
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