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Want To Open a Big O Tires Franchise? Here’s What It Will Cost You.

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While the global sales of automobiles went down in 2020, the industry itself has many opportunities. In the US alone, there are an estimated 278.6 million vehicles. Thus, opening a business related to automobiles is always a good idea. Instead of starting from scratch, we recommend franchising a business from an already established company. Big O Tires is one of the best ones in the market today. Let’s now talk about the requirements and the Big O Tires Franchise cost.  

Franchise Description

Big O Tires started its operations in 1962 when a group of tire dealers came together during the time that automobiles dominated the US market. The company is headquartered in Palm Beach Gardens, Florida, and has become one of North America’s largest retail tire franchisors. The franchisor is Big O Tires, LLC, where the franchisees could operate retail stores offering tires and other related products. 

Currently, they offer two franchise models, the Product Distribution Franchises and Business Format Franchises. 

Franchisee Training 

You will be asked to go through the company’s New Franchise Orientation. This ensures that you understand what the company is and why you should franchise Big O Tires. 

The franchisor provides the franchisees an online learning management system, TBC University, where you can enjoy 400 cataloged courses. There is an initial online training program and also a facilitated program. Their training could be held virtually or at any location as required by the franchisor. 

The field training and operations certification will be conducted at the Big O Tires Store designated by the franchisor. The duration of the initial training depends on how the franchisor sees the need for it. Generally, it should be one or two days of online training, two weeks of facilitated training, and two weeks each for required and optional field training. 

Every year, the franchisor runs national conventions, and the franchisees should attend the first national convention after opening their business. 

Territory 

The franchisee can operate one Big O Tires store at a single location. For every 50,000 residents in an area, only one Big O Tires store should be established. Thus, the franchisor will not operate nor grant a franchise to other people. 

Franchisee Obligations 

The Big O Tires store should be managed by the operator or a manager appointed by the franchisee. The franchisor will approve the assigned manager first. 

The franchisee and the manager should complete and satisfy all the training programs provided by the franchisor. And of course, the franchisee must agree and comply with all set standards, policies, and regulations set by the franchisor. 

Term of Agreement 

The initial franchise term is for ten years. This can be renewed for another ten years if all the requirements are met. A shorter-term could be offered at the franchisor’s discretion. 

Financial Assistance 

The franchisor may offer financing programs to its franchisees. The options and terms could be affected by several factors, including the creditworthiness of the franchisee, accounting rules, and availability of funds. The Big O Tires franchisees can also fast track their Small Business Administration loan process via the Franchise Registry Program. 

Did You Know?

While most franchisees are interested to know the Big O Tires Franchise cost, it’s also crucial that you know other details about the company. Here’s more about the Big O Tires.  

Best Vet-Friendly Franchise 

Big O Tires acknowledges the efforts of the veterans and those who are currently serving the country. And because of that, they waive the $35,000 franchise fee for its eligible franchisees. To date, they have become an industry model with their creative and innovative ways of offering a franchise.

Convert Your Current Shop to Big O Tires 

If you have an existing shop and would like to expand your reach, you can also convert it to Big O Tires. And yes, you get to enjoy the benefits of carrying the name and the same support for other franchisees.

Impressive Customer Packages 

One of the reasons why Big O Tires has been a big hit over the years is its customer-centric packages. For one, they have comprehensive and Affordable Warranty Protections. In addition, they offer a 12-month/12,000-mile Nationwide Limited Repair Warranty, and 24/7 Roadside Assistance. With these, you can be sure that customers will come flocking your way. 

Outstanding Corporate Values 

If you are looking for a company to franchise, you should also consider their corporate values. And we have to say that Big O Tires will not disappoint. Take a look at the core values that they practice in the business. 

  • Build trust in their customer and franchisee relationships
  • Deliver legendary customer service
  • Provide the highest quality products at a great value
  • Give back to their communities
  • Adapt and improve every day to grow and win in the marketplace
  • Preserve their heritage as they execute their future

More Than 450 Locations in 25 States 

With more than 450 locations in various states, and still growing, it shows that the business has so much potential. It also reflects how strong their support system is to their franchisees, something that you have to consider, most especially if you are new to this business model. 

Big O Tires Franchise Cost

Your Investment

Take a look at the estimated Big O Tires Franchise Cost below. 

Name of FeeLowHigh
Initial Franchise Fee$10,000$35,000
Initial Training – Fees, Travel & Lodging Expenses$1,000$7,800
Real Estate Leases (One to Three Months’ Rent Plus Security Deposit)$24,000$68,000
Equipment, Fixtures and Other Fixed Assets$100,000$235,000
Construction, Remodeling, Leasehold improvements and Decorating Costs$25,000$350,000
Signs$10,000$50,000
Grand Opening Advertising$10,000$50,000
Initial Inventory$55,000$125,000
Insurance and Other Security (3 months)$3,000$5,500
Computer Hardware and Software$18,000$27,000
Non-Recurring Pre-opening Costs$5,000$35,000
Additional Funds (up to 12 months)$50,000$150,000
ESTIMATED TOTAL*$311,000$1,138,300

Other Costs

Type of FeeAmount
Royalty (Product Distribution Franchises)
2% of each month’s 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 Protection Plan 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 up to 15% of gross sales 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 (TBC University)
No charge during the first partial year until the next March 31; charges may apply in future years.
National Convention Registration Fees
Varies depending on location and cost of the national convention. The most recent national convention fee was $325 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.
DST End User Software License Agreement Fees
Amount per store:
1. One-time Fees:
a. License fee: $1,000
b. Installation fee: $1,500
c. Conversion fee: $500
d. Store Training and On-Site Go-Live Support Fees: $5,500-$6,500 (for 5 days of training that also covers typical travel, lodging and meals expenses)
2. Monthly Maintenance and Support: $219 per month, which may be raised in accordance with the DST End User Software License Agreement.
QuickBooks Accounting Integration Fees
a. QuickBooks License – Premier Accountant Edition – $500
b. QuickBooks License – Enterprise Edition – $1,500 per year
c. QuickBooks Training – $1,300
d. QuickBooks Setup on Store Server – $150
e. QuickBooks Support during Integration – $1,000
f. QuickBooks Creating Beginning Balances – $850
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.
Bond
Varies; actual amount determined by the franchisee’s local group.
Rebill Charge
Currently 0.69% to 19.9% of the price of the tires purchased (or up to 36.64% for trailer tires), subject to change.
Interest
The franchisor may charge franchisees interest on various loans or other advances.
Product Transfer Payment and Administrative Fee
Product Transfer Payment: The difference between the price paid by a BFF Store and the price that would have been paid by a PDF Store;
Administrative Fee: $500 per occurrence of incorrect reporting of a product transfer.
Regional Funding Plan Fee
Varies, currently in the range of $0.10 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.

To get more information about other franchises, check out other resources here at Franchise How!

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