Can a Floors To Go franchisee face competition from competitive brands that Floors To Go controls?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
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ITEM 12. TERRITORY
A. Your Territory
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control. Specifically, you may face competition from other FTG Showrooms that we or our affiliates franchise or own and that operate at traditional sites outside your territory. Also, you may face competition from other outlets that we franchise or own, or from other channels of distribution or competitive brands we control, including, but not limited to, competition from the FTG Shop At Home program.
As part of the FTG System, FTG will grant territorial rights to you which are officially identified in Schedule "A" of the Membership Agreement. FTG will not open any companyowned Floors To Go Showrooms or permit other franchised Floors To Go Showrooms to be located within your territory. Your territory will be determined based on the factors that we deem relevant, which might include population, traffic flow, presence of businesses, location of competitors (including other showrooms), demographics, and other market conditions. You agree to conduct your business at the location designated in Schedule "A" of the Membership Agreement and in no other location. Schedule "A" to the Membership Agreement will include the location of your principal place of business (the approved Showroom location) and a description of your territory. If your territory is defined as a radius, it will be measured from your approved Showroom. Otherwise, the boundaries of a territory are typically designated by streets or by the political boundaries of cities as they exist on the date the Membership Agreement is signed.
FTG, under Section 1.2 of the Membership Agreement, specifically agrees that it will not open or license any other person or entity to open a Showroom using FTG's trade name or service marks within your territory designated in Schedule "A" to the Membership Agreement.
Source: Item 12 — TERRITORY (FDD pages 27–30)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, a franchisee may face competition from other channels of distribution or competitive brands that Floors To Go controls. Specifically, Floors To Go franchisees may face competition from the FTG Shop At Home program. Floors To Go also states that they have the right to establish, own, and operate similar businesses or any other businesses offering similar or dissimilar products and services through similar or dissimilar channels of distribution (including the Internet and similar electronic media) at any locations inside or outside a franchisee's territory, under trademarks or service marks other than the FTG Marks.
Floors To Go's affiliate, Abbey Carpet Co., Inc., offers franchises for floor covering stores under the name "Abbey Carpet & Floor". There are currently 420 showrooms in the Abbey Carpet System. Members of the Abbey Carpet System sell floor and window coverings and may compete to a certain extent with a Floors To Go Showroom. There may also be overlap between the territories of Floors To Go members and the Abbey Carpet & Floor franchisees.
This means that while Floors To Go will not open another Floors To Go showroom within a franchisee's territory, they reserve the right to operate other businesses, even those that are similar or competitive, under different brand names. This is a significant risk for franchisees as it means Floors To Go could potentially introduce competition into the market through other ventures. The conflict resolution provisions of the Membership Agreement would apply to any disputes relating to disputes among the FTG members and Abbey Carpet & Floor franchisees regarding territory, customers, or franchisor support.
Prospective franchisees should carefully consider the implications of this lack of territorial exclusivity and the potential for competition from other brands controlled by Floors To Go. It would be prudent to inquire about Floors To Go's plans for other brands and distribution channels in the franchisee's target market to assess the potential competitive landscape.