Al sits down to comfort Mark on whether or not Santa Claus is real. However, later on, Tim Allen starred in The Santa Clause in 1994, in which he becomes Santa after the previous Santa has an accident and dies in his front yard Christmas Eve. He even does the grunted "ho, ho, ho" in the first movie.
The title is a play on a line from the classic Christmas song "Santa Claus is Coming to Town," written by J. Fred Coots and Haven Gillespie in 1934: "You better watch out, you better not cry."