What is the amount of the Initial Membership Fee that Floors To Go permits to be deferred?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Schedule "A" | Item 12 |
ITEM 10. FINANCING
Neither FTG nor any of its agents or affiliates offers any financing arrangements, directly or indirectly, to you except that FTG permits deferred payment of the Initial Membership Fee which is paid over a period of time in conjunction with the CashBack Participation program (see Section 7.2 of the Membership Agreement). No interest will be charged to you and no separate promissory note will be executed by you. The amount of the Initial Membership Fee which is deferred is $9,000. You will grant FTG the right to retain all proceeds allocable to you from the FTG CashBack Program up to the $9,000 amount or for a five-year time period, whichever occurs first. If the CashBack Participation does not generate proceeds to FTG of $9,000, whatever lesser amount of proceeds is collected by FTG over the five-year participation period on your behalf will be deemed payment in full for your Initial Membership Fee. If your Membership Agreement is terminated prior to completion of the initial five-year term, the remaining balance of the Initial Membership Fee shall be due and payable by you to us in cash immediately upon the date of any such termination and FTG may assess attorneys' fees and other costs associated with the collection of such amount. FTG does not require any security interest or personal guaranty from anyone other than th
Source: Item 10 — FINANCING (FDD page 22)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, Floors To Go allows a portion of the initial membership fee to be deferred. Specifically, $9,000 of the initial membership fee can be paid over time through the FTG CashBack Program. The franchisee grants Floors To Go the right to retain proceeds from the FTG CashBack Program, up to $9,000, or for a maximum of five years, whichever comes first.
The FTG CashBack Program involves various floor covering and window treatment manufacturers offering cash back incentives for the purchase of selected products. When a franchisee purchases these selected items, they receive a cash rebate based on a percentage (up to 8%) of the purchase price. These rebates are then paid to Floors To Go on behalf of the franchisee.
If the CashBack Participation does not generate the full $9,000 within the five-year period, whatever amount is collected by Floors To Go during that time is considered full payment of the deferred initial membership fee. However, if the Membership Agreement is terminated before the end of the five-year term, the remaining balance of the initial membership fee becomes immediately due in cash. This deferred payment plan does not accrue any interest, and no separate promissory note is required.