Does a Floors To Go franchisee have the option to renew their membership?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
- Section 13 of the Agreement shall be supplemented by the addition of the following new Section 13.4, which shall be considered an integral part of the Agreement:
13.4 Your Interest Upon Termination.
Upon termination or refusal to renew or extend the franchise either by us or you for any reason, you will have no interest in the goodwill or intangibles of the franchised business or equity in the franchise, apart from the leasehold, fixtures, equipment and supplies you have purchased. We shall have the right (but not the duty unless required by Hawaii Rev. Stats. § 482E-6(3)), to be exercised by notice of intent to do so within thirty (30) days after termination or expiration of this Agreement, to purchase any and all improvements, equipment, advertising and promotional materials, products, supplies, inventory and any other items bearing our Marks at current fair market value. If we cannot agree with you upon a fair market value within a reasonable time, we shall designate an independent appraiser, and the appraiser's determination of fair market value shall be binding. If we elect to exercise any option to purchase herein provided, we shall have the right to set-off all amounts due to us from you under this Agreement and the cost of the appraisal, if any, against any payments to be made for any such purchase.
- Each provision of this Amendment shall be effective only to the extent, with respect to such provision, that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, Floors To Go franchisees may have the option to renew their franchise agreement. However, upon termination or refusal to renew or extend the franchise by either Floors To Go or the franchisee, the franchisee will not have any interest in the goodwill or intangibles of the franchised business or equity in the franchise, apart from the leasehold, fixtures, equipment, and supplies purchased. Floors To Go has the right to purchase any improvements, equipment, advertising and promotional materials, products, supplies, inventory, and any other items bearing their Marks at the current fair market value.
If Floors To Go and the franchisee cannot agree on a fair market value, an independent appraiser will be designated, and their determination of fair market value will be binding. Floors To Go can offset all amounts due from the franchisee under the agreement and the cost of the appraisal against any payments made for such purchases.
The modification in Section 13.4 of the agreement regarding the franchisee's interest upon termination is effective only to the extent that the jurisdictional requirements of the Hawaii Franchise Investment Law are met independently. This suggests that the specific terms regarding renewal and termination may vary based on state laws, particularly in Hawaii.