To what extent are transfer fees collectable by Floors To Go?

According to the 2025 Floors To Go FDD, the franchisor can collect transfer fees to the extent that they reflect the franchisor's reasonable estimated or actual costs in completing the transfer. This means that Floors To Go cannot charge an arbitrary or inflated transfer fee. The fee must be tied to the actual expenses Floors To Go incurs during the transfer process.

For a prospective franchisee, this is important because it provides some protection against excessive transfer fees. If a franchisee decides to sell their Floors To Go franchise, the transfer fee they are charged should be justifiable based on the franchisor's costs. This could include legal fees, administrative costs, and the expense of training the new franchisee.

However, the FDD does not specify exactly what costs are considered "reasonable" or how these costs are calculated. It also does not provide a range or cap on potential transfer fees. Therefore, it is important for a prospective Floors To Go franchisee to discuss the transfer process and potential fees with the franchisor during their due diligence. Understanding how Floors To Go determines these fees can help a franchisee plan for the future and avoid unexpected costs if they decide to transfer their franchise.