What general operations are expected of a Floors To Go franchisee?

ny and all amounts which we owe you, including any amounts due to you by us under the FTG CashBack Program, against any and all amounts which you owe us.

7. Our Expectation

• 7.1. General Operations. As part of the FTG commitment, we ask each member to:
• a. Commit to purchasing, for each of your Showrooms, a minimum of $350,000 or 80% of your total floor covering and window treatment purchases, whichever is greater, through the FTG System during each calendar year following the opening of each such Showroom. This minimum purchase requirement shall go into effect three (3) months after the Effective Date;
  • b. Adhere to high ethical standards of business;
• c. Keep the premises and any vehicles or signs displaying any of the FTG Marks safe, neat, clean, orderly, and in good repair;
• d. Maintain a competent, conscientious, and qualified sales and installation staff;
• e. Train each employee in the types and quality of Floors To Go floor coverings and familiarize employees with our price list to the extent necessary and appropriate for said employee to perform his/her duties and functions;
• f. Make prompt payment in accordance with the terms of invoices rendered to you from merchandise vendors and manufacturers for the purchase of floor covering products and other supplies, and for all other obligations necessary to conduct the business operations and to maintain reasonable financial stability and good credit standing, including, but not limited to, demonstrated ability to obtain and maintain credit with such merchandise vendors and manufacturers;
  • g. Maintain good customer relations; and
• h. Follow reasonable recommendations that we may make so that the operation of your Showroom shall in no way damage our reputation or the reputation of other members.
• 7.2. FTG CashBack Program. You will have the right to participate in the FTG CashBack Program. This program consists of various floor covering and window treatment manufacturers offering CashBack incentives for the purchase of selected floor coverings and window treatments, specifically marked as CashBack eligible. By purchasing such selected items, you will receive a cash rebate based upon a percentage of the purchase price of the

selected items purchased. These percentages range up to 8% of the purchase price of the selected items. All cash rebates will be paid by the suppliers to us on your behalf. You agree that you will have only one account number with each supplier. We will hold such funds, without liability for interest, and after verification of amounts received, and after setting off any amounts owed to us by you hereunder, will distribute such funds to you, annually or semi-annually. You will be notified on a regular basis of qualifying CashBack terms and any deduction therefrom.

Our goal is to obtain the best possible rebate terms from manufacturers for the FTG CashBack Program. However, our sole responsibility under the FTG CashBack Program is to properly distribute to you and our other members the funds paid into the FTG CashBack Program by participating manufacturers. We are not responsible if a manufacturer changes the terms of its rebate, discontinues its rebate, or fails to pay your rebate. You agree and acknowledge that we have no fiduciary duties with regard to the operation or administration of the FTG CashBack Program.

In the event you become the subject of a voluntary or involuntary case or proceeding commenced under Title 11 of the United States Code (the "Bankruptcy Code"), you hereby consent to relief from the automatic stay imposed by 11 U.S.C.

Source: Item 23 — RECEIPTS (FDD pages 47–204)