Big O Tires Franchise Costs, Fees & FDD

Year Business Began: 1962

Franchising Since: 1982

Headquarters: Palm Beach Gardens, Florida

Estimated Number of Units: 460

Franchise Description: Big O Tires, LLC is the franchisor. The franchisor’s parent company is TBC Corporation. The franchisor offers franchises for the operation of retail stores selling and servicing tires and related automotive products and services. Big O also sells Big O branded tires and automotive accessories to franchisees, and Big O and its affiliates also sell or lease other items to franchisees such as real estate, equipment, signs and services.
Training Overview: The franchisor will provide training for one person in the operation of the Big O store online (online training) and at one or more locations designated by the franchisor (facilitated training), and it will provide field training and certification for that one person at a Big O store. The online training may be conducted at the franchisee’s home or any other location the franchisee chooses. The number of weeks of this initial training will be the number specified by the franchisor in its discretion; currently, the franchisor specifies approximately 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 in a store. In addition to the initial training program, the franchisor may offer franchisees, their operator and managers or other personnel additional training programs, seminars and online training. These additional training programs may be conducted on a mandatory or voluntary basis and, at the franchisor’s discretion. The franchisor may periodically offer online training classes and host webinars for franchisees. The franchisor holds national conventions, which are currently held annually, but that is subject to change at the franchisor’s discretion. Franchisees (or their approved representative) must attend the first national convention after their store opens for business.

Territory Granted: The Franchise Agreement grants the franchisee the right to operate one Big O store at a single location. Subject to certain limitations, the franchisor agrees not to operate for itself or grant to any other person the right to operate any more than one Big O store for every 50,000 persons residing in the franchisee’s trade area. The franchisor may, in its discretion, redefine the trade area as population increases or moves within the trade area. Franchisees will not receive an exclusive territory.

Obligations and Restrictions: The Big O store will only be operated by the operator or a manager employed by the franchisee who is subject to approval by the franchisor. The franchisor, in its discretion, may exercise the right to approve or disapprove the original and later operators and managers. The operator or manager shall complete, to the franchisor’s reasonable satisfaction, all training programs, which it requires or provides at the time as it may reasonably prescribe. Franchisees must comply with all published rules, regulations, policies and standards established by the franchisor, including those contained in the manual.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Up to one additional term of 10 years after the initial term is available if requirements are met. The franchisor may agree to a shorter term, in its sole discretion, if the franchisee’s sublease or lease term does not equal the full term of the Successor Franchise Agreement.

Financial Assistance: The franchisor currently offers six financing programs to franchisees. All financing options and terms are provided at the discretion of the franchisor, which may be affected by such factors as: accounting rules, business and regulatory requirements, creditworthiness of franchisee, benefit to Big O and the availability of funds from internal or other sources. The franchisor may deny participation in any of these programs to any franchisee on this basis, for any other reason or for no reason. Big O franchisees are eligible for expedited Small Business Administration (SBA) loan processing through the SBA’s Franchise Registry Program. The franchisor will waive the initial franchise fee for qualified franchisees who are U.S. military veterans and first responders.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee/Minimum Deposit	$10,000	$17,500
Initial Training - Fees, Travel & Lodging Expenses	$1,000	$9,000
Real Estate Leases (One to Three Months' Rent Plus Security Deposit)	$40,000	$160,000
Equipment, Fixtures and Other Fixed Assets	$250,000	$395,000
Construction, Remodeling, Leasehold Improvements and Decorating Costs	$25,000	$750,000
Signs	$15,000	$75,000
Grand Opening Advertising	$10,000	$50,000
Initial Inventory	$75,000	$187,500
Insurance and Other Security (3 months)	$10,000	$20,000
Computer Hardware and Software	$20,500	$33,500
Non-Recurring Pre-Opening Costs	$5,000	$35,000
Additional Funds (up to 12 months)	$50,000	$150,000
ESTIMATED TOTAL	$511,500	$1,882,500

 
Other Fees

Type of Fee	Amount
Royalty	2% of gross sales to national account customers and key account customers, 2% of gross sales of farm class tires, 2% of excess service department sales and, based on the royalty matrix, currently between 3.5% and 5.0% of adjusted gross sales.
“Local Fund” for Advertising and Related Expenditures	A minimum of 4% of each month's gross sales, subject to increases or reductions in certain cases (currently reduced to a minimum of 3.6% based on certain marketing programs).
National Marketing Fee	Currently set 0.9% of each month's gross sales (raised from the amount of 0.25% while certain marketing programs are in effect).
National Auto Service Warranty and Roadside Assistance Plan	Currently $75 per store, per month, but can be changed by vendor.
Tire Pro-Tec+ Service Contract Administration Fee (TPP Fee) and Consumer Liability Insurance Policy Fee (CLIP Fee)	$1.20 per tire.
Point of Purchase Packages	Not more than $1,500 per year, as adjusted each year in accordance with Big O policies.
Market Reservation Fee	Will vary by circumstances, but generally will be in the range of $2,500 to $6,000.
Retail Accounting Centers (RAC)	Varies based on services provided, but not less than $200 per month.
National Fleet Accounts Administrative Fees	Varies, currently 1.25% of gross sales plus $0.95 per transaction to certain national fleet account customers.
AMRA Motorist Assurance Program Fees and Dues	Currently $1.00 per year, but subject to change.
Transfer Fees	$5,000 upon a transfer involving an assignment of the Franchise Agreement or a change in control. If the transfer does not involve an assignment of the Franchise Agreement or a change in control, the transfer fee is equal to Big O's expenses relating to the transfer up to $1,500.
Insurance Administrative Surcharge	10% of cost of insurance.
Interest on Late Payments	Lesser of 18% per year or maximum rate of interest allowed by law.
Successor Franchise Administration Fee	Varies.
Real Estate Rental and Fees	Payable to the franchisor if it owns or lease the store location and it leases, subleases or assigns it to the franchisee.
Training Fees	Will vary.
Training Fees (Learning Management System)	Currently none, but the franchisor may charge a fee of $150 per month.
National Convention Registration Fees	Varies depending on location and cost of the national convention. The most recent national convention fee was $499 per adult. Occasionally such fees have been waived for early registration or in conjunction with meeting certain sales targets.
Resale Fee	$5,000
Products and Services	Will vary.
Navex Software License Agreement (EULA) Fees	See FDD.
Tekmetric Shop Management System (SMS) and Fees	See FDD.
QuickBooks Accounting Integration Fees	See FDD.
Fees for Miscellaneous Assistance	Will vary.
Indemnification	Will vary under circumstances.
Costs and Attorneys’ Fees	Will vary under circumstances.
Audit Fees	Will vary under circumstances.
Noncompliance Service Charge	$500 per event of noncompliance.
Bond	Varies; actual amount determined by the franchisee’s local group.
Rebill Charge	The franchisor currently charges franchisees $3.00 per tire for any tires they purchase directly from the manufacturer or distributor who invoices the franchisor for the tires.
Interest	The franchisor may charge franchisees interest on various loans or other advances.
Product Transfer Payment and Administrative Fee	See FDD.
Regional Funding Plan Fee	Varies, currently in the range of $0.15 to $1.65 per tire, depending on the RDC and the location of the purchaser.
Manual Processing Fees	Varies, not to exceed $75 per occurrence.

The above information has been compiled from the FDD of Big O Tires. Year of FDD: 2025.
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