Big O Tires Franchise Costs, Fees & Owner Salary (2023)

Initial Franchise Fee ($30,000 to $35,000)

‍The initial franchise fee for a Big O Tires franchise ranges from $30,000 to $35,000. This fee compensates Big O Tires for granting the franchise and for various pre-opening services and assistance. The specific amount within this range depends on the type of franchise agreement and other factors.

Royalty Fee (3.5% to 5%)

‍The royalty rate that franchisees pay for Big O Tires generally starts at 5.0% of Adjusted Gross Sales. However, based on the Royalty Matrix, this rate can vary. For new stores, under the current Royalty Matrix, the maximum Royalty Rate generally does not exceed 5.0%, and the lowest royalty rate is not less than 3.5%. The exact rate is determined based on the store's Adjusted Gross Sales for the year and can be influenced by factors such as sales performance.

Advertising Fee (4.9%)

‍Franchisees are required to contribute to two main advertising programs:

1. Local Fund: Each month, franchisees must contribute a minimum of 4% of the store's Gross Sales to the Local Fund for advertising and related expenditures. This rate is currently reduced to 3.6% based on certain marketing programs.
2. National Marketing Program: Franchisees must contribute up to 1% of their previous month's Gross Sales to the National Marketing Program. The current contribution rate is set at 0.9% of Gross Sales.

Combining the contributions to the Local Fund and the National Marketing Program, the total advertising fee is approximately 4.5% of Gross Sales.

• Initial Training: Before opening a Big O Tires service center, franchisees are required to attend the brand's "New Franchisee Orientation" which includes both classroom instruction and hands-on experience. This training is comprehensive, covering various aspects of running a service center. The duration and content are tailored to ensure franchisees grasp the nuances of their operations. The training takes place at designated locations, and while some sessions are conducted in Palm Beach Gardens, Florida, others might be offered through an online virtual classroom.
• Field Training: Beyond the classroom, Big O Tires offers "New Franchisee Orientation (Field Training)" which is store-moderated. This training is divided into pre-classroom and post-classroom sessions, with the former spanning 40 hours and the latter taking up 160 hours. This hands-on training ensures that franchisees get a real-world feel of the operations.
• Fast Track Training: For those who come with experience, either as franchisees or managers, Big O Tires offers a "Fast Track" program. This program is designed to cater to the needs of experienced individuals, ensuring they get the specific training they require.
• Costs and Expenses: While Big O Tires provides the training, franchisees are responsible for all related expenses. For certain specialized training sessions, like the multi-unit franchise management training, there's a fee involved, currently set at $550.

Franchisees of Big O Tires are granted the right to operate a Big O Tires business at a specific location. The rights provided to the franchisees are limited to the designated location and do not encompass a broader exclusive territory.

This means that while franchisees have a specific location to operate, they do not have a wider exclusive territory, and their operations are confined to the designated location.

Big O Tires requires that the franchisee's store be operated either by the franchisee themselves, termed the "Operator," or by a "Manager" employed by the franchisee. This Manager, who is responsible for the day-to-day operation of the store, is subject to approval by Big O Tires.

If the franchisee is an individual, they can act as the Operator. Both the initial and any subsequent Operators and Managers are subject to approval by the franchisor. This approval is based on the successful completion of any required training by Big O Tires.