What is the 'CashBack Participation' in the Floors To Go Initial Membership Fee payment?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
IAL FEES**
A. Single Showroom Membership
As a new member, you will be charged an Initial Membership Fee of $10,000. This fee is payable as follows: (a) $1,000 is paid at the time your Membership Agreement is signed; and (b) the remaining $9,000 is paid through the FTG CashBack Program (described below) whereby 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 (referred to hereafter as the "CashBack Participation"). 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.
The FTG CashBack Program consists of various floor covering and window treatment manufacturers offering CashBack incentives for the purchase of selected floor covering and window treatment products. When you purchase such selected carpets and/or floor coverings you will be credited with a cash rebate based upon a percentage of the selected carpets and/or floor coverings purchased. These percentages range up to 8% of the purchase price of selected items. Such cash rebates will be paid to FTG on your behalf when you earn such CashBack incentives. FTG will hold such funds, without liability for interest, and after verification of amounts received, and after setting off any amounts that you owe to FTG, will distribute such funds to you annually or semi-annually. You are eligible to participate in the FTG CashBack Program and will be notified on a regular basis of qualifying CashBack items received on your behalf.
The Initial Membership Fee entitles you to participate in the FTG System and to receive various marketing materials currently available through the FTG System. Proceeds from the Initial Membership Fee are, in part, profit to us and are, in part, used to pay some of the following costs and expenses incurred by us for: (1) obtaining and screening Members; (2) administering the territories; (3) providing assistance to Members; (4) accounting fees and legal fees; (5) protection of our commercial symbols, names, proprietary trademarks, service marks and copyrights; (6) developing new product lines, marketing programs and advertising materials; (7) paying salaries and benefits to our management and employees;
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, the initial membership fee is $10,000. A new Floors To Go franchisee pays $1,000 when signing the Membership Agreement. The remaining $9,000 can be paid through the FTG CashBack Program.
The FTG CashBack Program allows Floors To Go to retain the franchisee's proceeds from the program up to $9,000 or for five years, whichever comes first. This is referred to as the "CashBack Participation." If the CashBack Participation does not generate $9,000 in proceeds within five years, whatever amount is collected by Floors To Go during that period will be considered full payment of the initial membership fee.
However, if the Floors To Go Membership Agreement is terminated before the initial five-year term is complete, the remaining balance of the initial membership fee is immediately due in cash. The FTG CashBack Program involves floor covering and window treatment manufacturers offering incentives for purchasing selected products, with rebates ranging up to 8% of the purchase price, paid to FTG on the franchisee's behalf. These funds are held by FTG, and after verification and deduction of any amounts owed to FTG, the remaining funds are distributed to the franchisee annually or semi-annually.
A franchisee is eligible to participate in the FTG CashBack Program and will be regularly notified of qualifying CashBack items received on their behalf. Also, if a new member reaches $350,000 of first quality, running line purchases, exclusive of promotional products, special purchases and SP's, through the FTG System within the twelve-month period beginning on the 90th day after the date their membership begins, their Initial Membership Fee will be waived, and all payments they have made for such fee will be refunded to them by FTG on or after the fifteenth month after the date their membership begins.