How is the Floors To Go Early Termination Fee calculated?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Showroom, depending on the size of your Showroom. FTG will cover these costs of the Redesign (i.e., non-tenant-improvement-item costs); however, if your Membership Agreement is terminated prior to completion of the initial fiveyear term, you must pay FTG an early termination fee equal to the amount associated with the Redesign of your Showroom less 20% for each full year from the effective date of your Membership Agreement that you remained a member (the "Early Termination Fee"). For example, if you became a member on March 1, 2025, and the cost of your Redesign was $30,000, and your membership was terminated on January 1, 2028, you would owe us a cash payment equal to $18,000 ($30,000 – [$30,000 X (20% x 2) = $12,000] = $18,000). The Early Termination Fee shall be due and payable to FTG in cash immediately on the date of any such early termination. You will not be required to repay any portion of the cost to Redesign your Showroom if you remain a
Source: Item 6 — OTHER FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, the Early Termination Fee is associated with the redesign costs of the showroom. The cost of the redesign is estimated to be between $20,000 and $50,000 per showroom. Floors To Go covers the costs of the redesign, but if the Membership Agreement is terminated before the initial five-year term is complete, the franchisee must pay an Early Termination Fee.
The Early Termination Fee is calculated by taking the total redesign cost and reducing it by 20% for each full year the franchisee remained a member from the effective date of the Membership Agreement. For example, if a franchisee became a member on March 1, 2025, and the redesign cost was $30,000, and the membership was terminated on January 1, 2028, the franchisee would owe $18,000. This is calculated as $30,000 minus [$30,000 X (20% x 2) = $12,000], which equals $18,000.
The Early Termination Fee is due in cash immediately upon early termination. However, a franchisee will not be required to repay any portion of the redesign cost if they remain a Floors To Go member for the entire initial five-year term. This fee is intended to recoup the investment Floors To Go makes in redesigning the showroom if the franchisee does not complete the full term of the agreement.