Is Big O Tires a good franchise? The FDD issued June 30, 2025 shows 461 franchised units, a 3.5% to 5.0% royalty matrix, a 4.5% ad load, and a two-part Item 19 averaging $2.82M.
Quick answer Big O Tires is a qualified yes for buyers who already know tire retail. The FDD issued June 30, 2025 reports 461 franchised stores and zero company-owned, a $17,500 initial franchise fee, a royalty matrix of 3.5% to 5.0% after a 5.0% opening partial year, and advertising currently running 3.6% local plus 0.9% national. Item 19 exists in two parts, with average gross revenues of $2,824,712.79 across 457 stores and only 40.9% of stores above that average.
The Big O Tires FDD issued June 30, 2025 reports 461 franchised stores as of March 31, 2025 and zero company-owned. The initial franchise fee is $17,500, split $10,000 with the application and $7,500 at signing. Big O is also one of the few franchised routes into tire retail, since Discount Tire does not franchise.
The FDD’s cover page states a total investment of $511,500 to $1,882,500 to begin operation, including $385,000 to $1,596,000 that must be paid to the franchisor or its affiliates. That second number is the tell: most of the money flows through TBC. The line-item Item 7 table behind the summary is not in our extraction, so read Item 7 in the FDD itself before building a proforma. Two disclosed costs belong in any model regardless: Item 6 puts opening inventory at $75,000 to $187,500, and Item 8 requires a minimum of 700 tire units in stock after the first 180 days of trading.
A 477 count does appear in the FDD, but as a stale total rather than a franchised figure. Item 20 shows total outlets peaking at 477 at fiscal year end March 31, 2023, when 460 franchised stores sat alongside 17 company-owned. Franchised counts since then read 460, then 462, then 461. Company-owned went 32, then 17, then zero. Big O closed 14 of those and sold the other 18 to franchisees, which is why the Big O Tires financials page now shows no company operation at all.
Item 1 traces a chain with no Mavis entity anywhere in it: Big O Tires, LLC to TBC Shared Services, LLC to TBC Corporation to TBC Holdings, LLC. Mavis bought TBC’s company-operated NTB and Tire Kingdom chains back in 2023, then agreed on March 31, 2025 to acquire Midas and closed that deal on June 16. Big O was in neither transaction, and TBC has said it intends to expand the Big O network now that Midas has gone. The full sequence is in Mavis bought Midas, not Big O.
The franchisor’s own lineage is older than any of that. Big O Tire Dealers, Inc., a Colorado purchasing cooperative formed in 1962 to buy tires at volume for independent dealers, merged into the company in December 1986. That co-op origin still shapes the model, because most of what a franchisee pays flows through purchasing rather than through the royalty line.
A new store pays 5.0% of adjusted gross sales during the partial year in which it opens. After that it moves onto the Royalty Matrix in Schedule 9 of the franchise agreement, which sets the rate by annual sales volume and is reissued every year. For new stores the current version caps at 5.0% and floors at 3.5%, and Big O may adjust it mid-year.
Three classes of business carry a 2% rate instead: national and key-account sales, farm-class tires, and service department sales above 40% of gross sales excluding those accounts. Separately, the incentive programs described in Item 5 can cut the rate to between 0% and 3% for the first two or three years, after which the matrix rate resumes.
Advertising sits on top and is not calculated from the royalty. Item 6 sets a Local Fund minimum of 4% of gross sales, currently reduced to 3.6%, plus a National Marketing Program fee of 0.9% that the Franchise Advisory Council raised from 0.25%. At the current rates that is about 4.5% of sales into advertising before any royalty. Arithmetic on the disclosed rates puts the opening-year total near 9.5% of sales and the matrix floor near 8.0%.
For context, Midas charges 2% to 10% of net revenue and funds marketing out of those royalties rather than through a separate contribution, which is the comparison worked through in Big O Tires vs Midas. Meineke prices by category and takes 3% on tires and state inspections against a $20,800 annual minimum. Jiffy Lube takes 4% of gross sales, or 3% for paying on time. Big O’s rate is mid-pack; its advertising requirement is the part buyers underestimate.
Item 19 exists and runs in two parts. Part A covers the 457 of 463 U.S. franchised stores that traded all of calendar 2024 and reported revenue every month. Average annual gross revenues were $2,824,712.79, and 187 stores, or 40.9%, cleared that average. The remaining 59.1% did not, which is the sentence to remember when a broker quotes the average at you.
Part B covers the 280 stores, about 61.3% of the system, that submitted expense data and stayed under one owner for the year. Average total income was $2,941,799. Cost of goods sold ran 42.1%, gross profit 57.9%, total labor 26.7%, total operating expense 49.1%, and net income from operations 8.8%.
Multiplying those two disclosed averages, 8.8% of $2,941,799, lands near $259,000 of store-level operating income. Big O does not publish that dollar figure. It is arithmetic on two averages rather than a number any single store earned, and the Part B definition excludes taxes, debt service, and owner compensation. Treat it as a ceiling to test against your own model, not a projection.
Item 8 answers this without hedging. For the 12 months ended March 31, 2025, Big O and its affiliates recorded consolidated revenues of $385,060,332. Of that, $342,729,760, or 89.0%, came from products and services sold to Big O franchisees. Real estate leased or subleased to franchisees added $10,100,061 and ran a net loss of $399,428 once lease expense was netted against it.
That mix explains the fee structure better than the fee table does. A 3.5% royalty floor is affordable for a franchisor whose agreement also routes tire purchasing through its own regional distribution centers, requires a majority of tire inventory to be Big O brand or Big O exclusive product, and adds a $3.00 per tire rebill charge on tires bought direct from a manufacturer. The number to underwrite is product margin, not the royalty percentage.
Item 12 states plainly that you will not receive an exclusive territory. What the agreement grants is a Trade Area with a density cap of one Big O store per 50,000 residents, a two-mile radius inside which Big O will not open another outlet without your written approval, and a first option to take the franchise if anyone proposes a store within five miles. Approval given inside the two-mile ring is permanent, survives a sale of the store, and cannot be revoked.
Two further terms deserve a read. TBC and its non-Big O subsidiaries distribute competing tire brands including BKT, Sailun, Prinx, and Laufenn, and Item 12 states that retail outlets owned by or carrying products of TBC companies may sit close to your store or inside your Trade Area. And franchisees may not sell through their own website or social media; the stated current policy is to withhold that consent. The Big O Tires territory page carries the disclosed rights in full.
Operators who already know tire retail. Part B tells you gross margin sits near 58% and labor near 27%. Those are the two figures a buyer has to hit, and hitting them is an operating skill rather than something the brand supplies.
Buyers concentrated in the Mountain West and Southwest. This is a regional system. At March 31, 2025 Item 20 counted 93 outlets in California, 69 in Colorado, 67 in Arizona, and 50 in Utah, against 12 in Texas and one each in Ohio and Oregon. Distribution centers and local advertising groups are built where the density already is.
Multi-store buyers. The Royalty Matrix rewards volume, and a qualified Multi-Store Royalty Group with common ownership reaches lower rates at a lower per-outlet sales threshold than a single store can.
First-time buyers from outside the automotive trade. A 700-tire inventory minimum, a mix requirement enforceable by termination, and a product-margin-driven relationship with the franchisor all reward prior trade experience.
Anyone planning to underwrite on validation calls alone. Item 20 discloses that some franchisees have signed confidentiality clauses during the last three fiscal years and that current and former operators may not be free to speak openly about their experience. Build the model on the Item 19 tables and your own market work, then use calls to test it.
Buyers who want a protected market. Item 12 grants no exclusivity, and TBC-affiliated retail may operate inside your Trade Area selling competing brands.
Big O Tires is a good franchise for a narrow buyer, and the FDD is unusually direct about who that is. The brand discloses real store economics in two forms, has held franchised counts near 460 across three reported years, and has exited company operation entirely, so the franchisor no longer runs stores against its own network. The costs are a royalty that starts at 5.0%, an advertising load near 4.5% at current rates, a non-exclusive territory, and a supply relationship in which 89 cents of every franchisor revenue dollar comes back out of franchisee purchasing.
The growth picture is flat rather than expanding. Transfers ran 44, then 24, then 19 across the three reported years, and 13 signed franchise agreements were awaiting store openings at March 31, 2025 against 13 projected new outlets for the following year. If you want disclosed unit economics and a durable regional brand you can operate well, Big O supports the case. If you want expansion-story upside or a protected market, look elsewhere.
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About this analysis The franchise data in this article is drawn from VetMyFranchise's structured analysis of 2,300+ Franchise Disclosure Documents filed with U.S. state regulators. See our data & methodology.
For an experienced tire operator, yes, with conditions. The brand discloses a two-part Item 19, has held franchised counts near 460 for three straight years, and the franchisor now operates zero stores of its own. The conditions are a royalty matrix that starts at 5.0% in the opening year, an advertising load of about 4.5% of gross sales at current rates, a non-exclusive territory, and a supply relationship that sends most franchisor revenue back through franchisee purchasing. Buyers outside the automotive trade should treat it as a second franchise rather than a first.
A store pays 5.0% of adjusted gross sales for the partial year in which it opens, then moves onto the Royalty Matrix in Schedule 9 of the franchise agreement. For new stores the current matrix caps at 5.0% and floors at 3.5%, and Big O updates it annually. Separate 2% rates apply to national and key-account sales, farm-class tires, and excess service department sales. Certain incentive programs cut the rate to between 0% and 3% for the first two or three years. Advertising sits on top: a 4% Local Fund minimum currently reduced to 3.6%, plus 0.9% for the National Marketing Program. See the Big O Tires fees page for the full schedule.
Yes, in two parts. Part A reports average annual gross revenues of $2,824,712.79 for the 457 of 463 U.S. franchised stores that met the reporting criteria for calendar 2024, and states that 187 stores, or 40.9%, exceeded that average. Part B covers the 280 stores that submitted expense data and stayed under one owner all year, reporting average total income of $2,941,799 with cost of goods sold at 42.1%, gross profit 57.9%, total labor 26.7%, total operating expense 49.1%, and net income from operations 8.8%.
TBC. Item 1 of the FDD issued June 30, 2025 identifies Big O Tires, LLC as a wholly-owned subsidiary of TBC Shared Services, LLC, which sits under TBC Corporation and then TBC Holdings, LLC. Mavis bought TBC's company-operated NTB and Tire Kingdom chains in 2023 and closed on Midas on June 16, 2025 under an agreement announced that March. Big O was in neither transaction. The franchisor traces back to Big O Tire Dealers, Inc., the 1962 purchasing cooperative that merged into the company in 1986.
The initial franchise fee is $17,500, paid as $10,000 with the application and $7,500 at signing. Item 6 puts opening inventory at $75,000 to $187,500, and Item 8 requires each store to carry a minimum of 700 tire units after its first 180 days. A resale fee of $5,000 applies if Big O supplies the buyer when you sell. The FDD's cover page puts the total investment at $511,500 to $1,882,500, including $385,000 to $1,596,000 payable to the franchisor or its affiliates; the line-item Item 7 table behind that summary is not in our extraction, so read Item 7 in the FDD itself before building a proforma.
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