Will the Advertising Fees and earnings inure to Floors To Go's benefit?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
G received from its members during fiscal year 2024 were used to solicit new franchise sales.
All Advertising Fees paid by you will be used solely for the development of advertising materials and marketing programs for system-wide use and will not be used for marketing individual showrooms or to defray any of FTG's expenses not directly related to the development of these materials and programs. Members, including company-owned outlets, are required to pay Advertising Fees (payable semi-annually, in two equal payments of $1,500). Members are not required to participate in any other advertising fund. FTG will direct all programs financed by the Advertising Fees, with sole discretion over the creative concepts, materials and endorsements used, market and media selection (including whether the corresponding media coverage is local, regional or national in scope), and the allocation of resources. Advertising Fees may, in FTG's sole discretion, be used to pay the costs for preparing and producing customizable artwork, print media, television and radio commercials, as well as for conducting market research, public relations, and paying FTG's related administrative expenses.
FTG will have absolute discretion with the administration of the funds received as Advertising Fees, including but not limited to, the allocation of the funds, methods of payment, and reimbursement of expenses and advances paid by FTG to develop any such advertising materials or programs. The Advertising Fees and earnings, if any, will not otherwise inure to
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 22–27)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, the advertising fees and any earnings derived from them will not directly benefit Floors To Go. The document states that Floors To Go will maintain separate bookkeeping accounts for these advertising fees.
Floors To Go is given absolute discretion in administering the advertising funds, including allocating funds, determining payment methods, and reimbursing expenses for developing advertising materials or programs. This means that while Floors To Go controls how the money is spent, it must be used for the benefit of the franchise system as a whole, rather than for Floors To Go's direct profit.
The FDD specifies that all advertising fees paid by franchisees are to be used solely for developing advertising materials and marketing programs for system-wide use. These fees cannot be used for marketing individual showrooms or to cover Floors To Go's general expenses unrelated to these materials and programs. This ensures that the advertising fees are reinvested into the franchise system to support brand awareness and customer acquisition for all franchisees.
In fiscal year 2024, 100% of the advertising fees Floors To Go received from its members were used for production and media placement expenses, and none were used to solicit new franchise sales. This demonstrates a commitment to using the advertising fees as intended, further assuring franchisees that their contributions are being used to support the existing franchise network.