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Business Description

Big G is a Nevada Limited Liability Company originally incorporated as ,a Nevada corporation on December 3D, 1982, and subsequently converted to a limited liability company on September 28, 200'7. We do business under our current organizational name Big O Tires, LLC, as well as “Big O” and “Big o Tires”, and no other name. Big O's principal place of business is 4280 Professional Center Drive, Suite 400, Palm Beach Gardens, Florida 33410. Big O's agents for service of process are listed in Exhibit. In December 1986, Big O Tire Dealers, Inc, a Colorado corporation (“Dealers”), was merged with us. We were the surviving company. Before the merger, our name Was Tires, Inc. As part of the merger, olir name was changed to Big; O Tires, Inc., and later changed to our current organizational rained. Dealers was originally established to act as a purchasers' Cooperative to obtain tires for associated fire dealers at favorable prices. Dealers is our predecessor. It was formed in 1962. The last, principal place of business of Dealers was 602:1 South Syracuse Way, Suite: 102, Englewood, Colorado 80111. We have several companies who are our affiliates, which are involved in providing products or services to some or all of our franchisees. Big O is now a wholly-owned subsidiary of TBC Shared Services, Inc. (“TBC Shared Services”), a Delaware corporation. TBC Shared Services is a wholly-owned subsidiary of TBC Corporation, a Delaware corporation (“TBC”). TBC is a marketer and distributor of tires and other products for the automotive replacement-market, and sells products and supplies services to Big O franchisees. TBC is in turn wholly owned by TBC Holdings, LLC, a Delaware limited liability company (“TBC Holdings”), the principal business address of TBC Shared Services, TBC, and TBC Holdings is 4300 TBC Way, Palm Beach Gardens, Florida 33410. Each of TBC Shared Services, TBC, and TBC Holdings may be deemed parents of ours; Carroll's, LLC, a Georgia limited liability company, is a subsidiary of TBC and also sells products to Big Q franchisees. The principal business address of Carroll's is 4168 Old Dixie Highway, Hapevilki Georgia 30354. Carroll's, LLC sometimes does business under the name National Tire Wholesale;: Franchisees may also periodically purchase tires from TBC Brands, LLC, a.Delaware limited liability company (“TBC Brands”), which also is a wholly-owned subsidiary of TBC;. The principal business address of TBC Brands is 4300 TBC Way, Palm Beach Gardens, Florida 33410. TBC Shared Services also owns TBC Retail Group, Inc. (d/b/a Tire Kingdom, formerly known as Tire Kingdom, Inc.), a Florida corporation (“TBC Retail Group”), which has several subsidiaries, including Midas International, LLC (“Midas”) and Midas Canada Inc. (“Midas Canada”). TBC Retail Group also operates non-Big O retail outlets for the sale of tires and related automotive products and services (See Item 12 for more details) and may periodically operate such retail outlets, under the Big O Tires, name. It is responsible for the management of Big O; the principal business address ofTBC Retail Group, Midas, and Midas Canada.is 431)0 TB.C Way, Palm Beach Gardens, Florida 33410. Tire America, LLC (“Tire America”) is a Delaware limited liability company and a wholly owned subsidiary of TBC Retail Group. Tire America began selling tires online to consumers in 2G18. The tires are purchased online and may be installed through a national, network of participating tire installers, which will include Midas and Big O franchise locations that agree to become tire installers.

Prior Experience

In December 1986, Big O Tire Dealers, Inc, a Colorado corporation (“Dealers”), was merged with us. We were the surviving company. Before the merger, our name Was Tires, Inc. As part of the merger, olir name was changed to Big; O Tires, Inc., and later changed to our current organizational. Dealers was originally established to act as a purchasers' Cooperative to obtain tires for associated fire dealers at favorable prices. Dealers is our predecessor. It was formed in 1962. The last, principal place of business of Dealers was 602:1 South Syracuse Way, Suite: 102, Englewood, Colorado 80111

Business Offered

We offer franchises, for the operation of retail stores selling and servicing tires and related automotive products, and services (“Big O Stores” or “Stores”). 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. Also, Big O conducts wholesale operations under which it sells non-Big O brand tires and other automotive accessories; to Big O franchisees and to other purchasers. Big O Stores operate under the service marks “BIG D” and “BIG O TIRES” and other trademarks and trade names, service marks and other logos and symbols periodically designated by Big (collectively, “Licensed Marks”) and use our proprietary licensed methods of doing business.(‘‘Big O System”). The Stores are serviced through regional sales, and distribution centers (“RDCs”), which are owned and/or leased by us and operated by us. Big O offers franchises under' two franchise models: Product Distribution Franchises and Business Format Franchises. (The franchisees for these franchises are referred to, respectively, as “Business Format Franchisees” or “Product Distribution Franchisees”). The information in the disclosure document applies to Business Format Franchises only. Production. Distribution Franchises are offered under a separate disclosure document and under different terms. When we refer to “your franchise”, we mean your Business Format Franchise. When we refer to “your Franchise agreement or the “Franchise Agreement” or the franchise Agreements”, we mean the Business Format Franchise Agreement in Exhibit B-1 (the “BF Franchise Agreement” or “Franchise Agreement”). Before 2006, we offered only Product Distribution Franchises, except for certain Business Format test market programs in southern Nevada, which ended around April, 2006. The Big O network is in the process of transitioning from the Product Distribution Franchise model to the Business Format Franchise model. We are only offering new Big O franchisees Business, Format Franchises, but we anticipate that we will continue to have Product Distribution Franchises in our network for a significant amount of time. As of March 31, 2019, we have 418 Stores (hot including company owned stores) that operate as Business Format Franchises. Product Distribution Franchisees will be allowed the option to convert product Distribution Franchise Stores (“PDF Stores”) to Business Format Franchise Stores (“BFF Stores”) at times and under conditions prescribed by us (we refer to Product Distribution Franchisees that convert to Business' Format Franchisees as “BFF Converters”), We do not anticipate that Business Format Franchisees will be allowed.to convert BFF Stores to PDF Stores. You must operate your Big O Store according to our standards and specifications and must sign our standard BFF Franchise Agreement exhibit B-D. You will be granted the right to use Our Licensed Marks and Big O System only with the operation of your Big O Store. We Use the term “Franchised Business” to mean the business of operating a Big O store the Franchise Agreement using the Licensed Marks and the Big O System. We may grant you multi-unit rights under the terms of ah Area Development Agreement (E5chibit W) for a designated territory for multiple Big O Stores. You will be assigned to a local group (“Local Group”) Which, among other things, coordinates group or regional marketing larid advertising programs in your market, area and collects and administers fends for these programs. If a Local Group has not been formed in your geographical area^ you must, at our discretion, form a Local Group. You must comply with the decisions that the Local Group makes following procedures; and guidelines approved by us. See Item 11 for further discussion of Local Groups. We offer several programs for eligible persons to acquire franchises, including “‘Conversion Store” programs. As used in, this disclosure, document, the term “Conversion Store” means a Big O Store converted from a non Big O Store, It does not include a Store that converted from a PDF Store to a BFF Store., Also, if you are willing and able to open two, or more Stores within certain areas within a mutually agreed upon time period, you may qualify to acquire franchises at individually negotiated and maturely agreed upon timetables, discounts incentives.

Initial Fees

Except as described below, the initial franchise fee is $30,000 and is due as follow:: (i) $10,000 when you submit to us a franchise application and sign a Franchise Deposit Receipt Agreement, a copy of which is attached to this disclosure document as Exhibit E: and (ii) $20000 when you sign the Franchise Agreement and before you commence your financing. Except as provided in this paragraph, the initial franchise fee, including: the deposit, is fully earned when charged and is non-refundable under any circumstance. First, if we^ do not approve the franchise application, we will refund the initial $10,000 to you. Second, if you fail to successfully complete the initial training program, we may terminate the Franchise Agreement and upon receipt from you of a general release in a form, approved by us, refund a portion of the initial fee; the portion refunded will be the; initial franchise fee less' the costs \ye: incurred in your approval process,, your training and any other administrative expenses. Finally, if you sign a Franchise Agreement without the Premises (as defined in Article I of the Franchise Agreement) for the Store identified in the Frarichise Agreement and you are unable to locate and obtain our approval 0f Premises within 12 months after the effective date of the Franchise Agreement we may terminate the Franchise Agreement at our option, in which event we will refund the initial franchise fee actually paid to us less $10,000 for the site selection services we provided to you upon receipt from you of a general release in a form approved by us. If you sign a Franchise Agreement in. a situation where a franchise broker has been involved in the acquisition or sale of the franchise, the initial franchise fee paid by you when you sign a Franchise Agreement is nonrefundable under, any circumstances. In the event any incentive reduces the amount of the initial franchise fee to less than $10,000, you will still be required to pay $10,000 with the franchise application. Upon your execution of the Franchise Agreement, any amount of this payment in excess of your initial franchise fee will be applied to your accounts receivable for products purchased from us. If you are an existing franchisee in good standing whose Franchise Agreement is expiring, you may renew your franchise by signing our then current form of Franchise Agreement (‘‘Successor Franchise Agreement”) for a successor term of 10 years. We may, in our sole discretion, agree to a shorter Successor Franchise Agreement term if you are unable to extend your lease or sublease for (his full Successor Franchise Agreement term. We waive the payment of the initial franchise fee for a Successor Franchise Agreement, but you must pay a successor franchise administration fee. See; Item 6 below. First Option Rights. Subject to certain exceptions generally described in this paragraph or Item 12, each franchisee is' granted ah option to apply for any hew Big O franchise to be located within five miles Of the: franchise's existing Big O Store, determined as a radius office miles from the geographic center of your location, You must meet, certain conditions to exercise your First Option Rights, including that you are in compliance with your Franchise Agreement, as determined solely by Big O. If you apply for a Big O franchise using, your first, option rights, the franchise deposit must be paid with your application to exercise your first option rights. The balance of the initial franchise fee must be paid to us at the time specified by us in our notice of the right to exercise first option rights; but in no event later than the earlier, of: (a) date you sign the new   Franchise Agreement, Or (b) 120 days from the deadline for submitting an application to Big O to exercise your first option rights (this deadline is 30 days after Big Q gives notice that the franchisee may exercise its first option rights). The franchise deposit becomes nonrefundable upon our approval of your franchise application. See Item 12 for a more detailed discussion on your First Options rights.

Financing

Note 1:: General Factors: All financing options and terms are provided at the discretion of Big O, which may be effected 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. Big O may deny participation in any of these programs to .any franchisee on this basis, for any other reason or for no reason. Note 2: Source of Financing: By Big Q for all programs listed above Note 3: Down Payments: May be required for any program listed above. Note 4: Prepayment Penalty: There is no prepayment penalty on any financing program. Note 5: Automatic Clearing House Payments: Unless otherwise specified, all amounts payable to Big O must be paid by Automatic Clearing House debits to your checking account. Note 6: SBA Registry: Our franchisees are eligible for expedited Small Business Administration (“SBA”) Joan processing through the SBA's Franchise Registry program. See www.franchiseregistry.com. ?Note 7: General Interest Rate Terms: Unless otherwise noted, the interest rate on loans provided) by Big O will be the “prime rate” as published in the Wall Street Journal plus 3% per annum. This may vary as negotiated. Unless otherwise noted, the increased interest rate on default is the littlest of 18% per year or the highest rate permitted by applicable law. Note 8: General Default Terms: The standard promissory note; in Exhibit G provides that (a) your liability on default includes acceleration of the note; increased interest rate, and payment .of collection costs (including attorney's fees); and (b), you waive delinquency of collection, presentment for payment arid duty to enforce security. The security agreement in Exhibit H provides that: (a) on your default, we can take possession of the collateral, and you are required to pay costs of collection (including attorney's fees): and (b) you waive any right to have Big O seek collection from a third party or for Big O to make presentment on payments made to Big O wilt. Respect of collateral.. The Franchise agreement provides that Big O will have good cause to terminate your Franchise Agreement if you (or any of your affiliates or guarantors) default on any loan, agreement or lease with Big O; Franchise Agreement Section 19.01(k). Note 9: Financing of Delinquent Payments: Big, O may, in its discretion (without waiving any other rights available) .enter into negotiated payment arrangements with franchisees who have been late in payment. Under these circumstances, we may charge a loan origination fee, we may impose restrictions or the franchisee's operations and we may require security and/or other consideration for the loan. Note 10: Real Estate .Sublease: Subject to change by Big O in its discretion, your rent will generally be: (1) market rates as determined by Big O, or (ii) Big O's cost plus a 5 percent mark-up. Initial rental rates are generally subject to increase on a periodic basis. Improvements, to the leased facility made by us will require additional rent sufficient to amortize the improvements plus' provide return on the investment. Liability upon Default: Loss Of security deposit; termination of sublease; liability to Big O for all damages suffered and/or costs incurred as. A result of default; late fees, interest; cost of collection including attorneys' fees. Big O has a right of re-entry and the right to terminate the Franchise agreement. See Sublease Exhibit F. Note i l': Real Estate Lease: Rent will be calculated to include amortization of the cost of property including improvements plus a return on the investment; these rates subject to change on a periodic basis. Liability Upon Default: Loss of security deposit; termination of lease; liability fo Big 6 for all damages suffered and/or costs incurred as a result of default; late fees; interest; cost of collection including.attomeys' fees. Big Q has a right of re-entry. See. Lease Exhibit P. Note 12: Conversion Store Financing Program-: The term “Conversion Store” does not include conversions from a PDF to a BFF store. Amount Financed: Varies as negotiated by Big O and Franchisee. This may include up to $75,000 in financing to acquire initial inventory from RDCs only. This may also include up to an additional $20,000 in financing in the form of a credit to your trade account, based on your purchase of signage materials meeting our specifications. Big O nay also provide funding by matching dollar for dollar up to $10,000, the amount you spend for. opening or changeover advertising within T80 days of opening. You will be required to spend the matching funds in accordance y/ith certain conditions and deadlines determined % us; You may also be entitled under our new store rebate program to receive an annual rebate applied to your trade account with us in the amount that we periodically specify .of up to $2,000 each year after Opening for' up to I'O years, las described in Item 5, if you meet our requirements., Payment Terms: Generally, monthly payments of principal and interest for 36 months. For the financing b^ed on your signage purchases, monthly payments of principal only for 120 months. See, Converter Pfider, Schedule 7 to Franchise Agreement; Exhibit G. Promissory Note (Inventory Note and Signage Trade Account Credit Note). Note 13:; Additional :Store Develoonierit Financing Program: Eligibility: When expanding to create additional Big O Stores you may be eligible; for the financing amounts and terms described in Note 12 above if you:: (I) have supported our RDCs through inventory purchases, (ii) attended monthly owner's meetings, held in your region, (iii) are current with your financid commitments and reporting obligations to Big O, (iy) are in compliance with all Big D related agreements and (v) exhibit an overall support of system marketing plans. Pavirtent Terms: For inventory for area developers, generally, monthly payments of principal and interest for 36 months. For inventor for other existing.franchisees, generally, interest only payments for 6 months, then monthly payments ofprincipal and interest for 30 months. For the financing based on your signage purchases, monthly payments of principal,onjy for 120 months. See, Converter Rider, Schedule 7 to Franchise Agreement; Exhibit G. Promissory Note (Inventory Note and Signage Trade,Account Credit Note). Note 14: Other Financing: Documentation Required: Generally Promissory Note^ Exhibit G and Security Agreements Exhibit H. On occasion, we sell the; notes receivable we receive from our franchisees to third party lenders. In that event, the Fr^chisees may need to make payment directly to the third party lender. We reserve the right'to continue to bccasibnally do so in the friture in our discretion. We may remain primarily liable to provide all services, if any,, due to you under the notes receivable from you, and the tliird party who may acquire these notes may be immune under the law to any defenses to payrhent you may have against us. Also, the Security Agreement in; Exhibit H provides that, if we transfer our rights under the Security Agreement to a third party, in any litigation brought by the third party to recover sums due or recover collateral under the Security Agreement, you may not assert against that third party any defenses or claims, you may have against us. All finEincing that:we Offer may have significant regulatory ;implications to Big O. We reserve the right in our sole discretion to deny participation in any ,ofthese programs to any franchisee on this basis, for amy other reason or for no reason. We do not offer financing under which you must confessjudgment against us or a lender. We do not receive any direct or indirect payments;for placing financing, We do not.guarantee your obligations to third parties other than as set forth in this Item 10,

Franchisee Revenue and Profit

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised auditor franchisor-owned outlets, if there is a reasonable basis for the information and if the information is included in the disclosure document, Financial performance information that differs from that included in Item 19 may be, given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplies the information provided in this Item 19, for example, by providing information about possible performance; at a particular location or under particular circumstances. The following information is provided for the purpose of helping you evaluate the potential earnings capability of a Big O .Store. Please .carefully read dl information in this Item 19, including the statements, following, the; tables, which explain the information provided in the tables below and the limitations on this and the other information, contained in this Item 19.