D71/100FDD 2025
Big O Tires — Litigation & Risk
Automotive - Repair & Service · FDD Items 3, 4 & 5
Moderate — Review
3 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
71 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
352
Government-backed loans issued
Default rate
14.5%
vs <3% typical · system-wide
5-yr default rate
0.0%
Defaults
42 loans
Loans charged off or defaulted
Total loan volume
$222.9M
Avg loan size
$633K
Participating lenders
72
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Colorado
State whose law governs disputes — relevant if you're not based there
What drove the 71/100 rating
Risk Score Breakdown
- 01HIGHActive multi-front litigation including franchisee misrepresentation claims that directly undermine trust in franchisor disclosures
- 02MINORUnit count declining (-0.2% YoY) despite 461-unit system size, indicating market saturation or franchisee attrition
- 03MINORNet profit margin of only 9.2% ($258,878 on $2.8M avg revenue) leaves minimal buffer for royalty payments (3.5-5%), labor costs, and unexpected expenses
- 04MINORThree separate class action lawsuits (tire protection program, wage/hour violations at company stores, and franchisee false representations) suggest systemic operational or disclosure issues
- 05MINORHigh initial investment range ($511.5K-$1.88M) combined with thin margins creates extended payback period and capital recovery risk
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.