What is the expectation for Floors To Go franchisees regarding working capital?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Working Capital.
You agree to maintain sufficient working capital to pay all obligations incurred which relate to your Showroom when the same are due.
Failure to pay such obligations when due could constitute an event of default under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, franchisees must maintain sufficient working capital to cover all obligations related to their showroom as they become due. This requirement is outlined in Section 7.6 of the document.
The FDD emphasizes the importance of meeting financial obligations, as failure to do so could lead to a default under the franchise agreement. This highlights the need for careful financial planning and management on the part of the franchisee to ensure they have enough liquid assets to handle day-to-day expenses, inventory costs, and other operational needs.
This requirement is typical in franchising, as franchisors want to ensure that franchisees can sustain their business and uphold the brand's reputation. Prospective Floors To Go franchisees should carefully assess their financial resources and develop a detailed budget to ensure they can meet this working capital requirement and avoid potential default situations.