What does the Floors To Go Initial Membership Fee entitle a new member to?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
lifying CashBack items received on your behalf.
The Initial Membership Fee entitles you to participate in the FTG System and to receive various marketing materials currently available through the FTG System. Proceeds from the Initial Membership Fee are, in part, profit to us and are, in part, used to pay some of the following costs and expenses incurred by us for: (1) obtaining and screening Members; (2) administering the territories; (3) providing assistance to Members; (4) accounting fees and legal fees; (5) protection of our commercial symbols, names, proprietary trademarks, service marks and copyrights; (6) developing new product lines, marketing programs and advertising materials; (7) paying salaries and benefits to our management and employees; and (8) marketing and selling memberships.
In addition to the Initial Membership Fee, you will be obligated to make certain other expenditures, which are described in Items 6 and 7 below. Some of these expenditures must be made before you can open your Showroom for business. However, other than the Initial Membership Fee, you will not be required to pay FTG or its affiliates any fees or amounts for services or goods received from them prior to the time you open your FTG Showroom for business.
The Initial Membership Fee is not refundable except that if you reach $350,000 of first quality, running line purchases, exclusiv
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to Floors To Go's 2025 Franchise Disclosure Document, the Initial Membership Fee grants new members the right to participate in the Floors To Go System and receive currently available marketing materials. This fee contributes to covering Floors To Go's costs related to member acquisition and support, territory administration, assistance to members, accounting and legal fees, protection of intellectual property, development of new products and marketing, employee salaries and benefits, and overall marketing and sales efforts.
The Initial Membership Fee for a single showroom is $10,000. A franchisee pays $1,000 upon signing the Membership Agreement. The remaining $9,000 is paid through the FTG CashBack Program over five years. Under this program, Floors To Go retains proceeds from CashBack incentives earned on the franchisee's purchases of selected floor covering and window treatment products. If the CashBack Participation does not generate $9,000 within five years, the lesser amount collected is considered full payment. However, if the Membership Agreement terminates before the five-year term ends, the franchisee must immediately pay the remaining balance of the Initial Membership Fee in cash.
The FTG CashBack Program involves manufacturers offering incentives, potentially up to 8% of the purchase price, on selected products. Floors To Go receives these rebates on behalf of the franchisee, holds the funds without interest, and distributes them annually or semi-annually after verifying the amounts and deducting any debts the franchisee owes to Floors To Go.
It is important to note that the Initial Membership Fee can be refunded if a franchisee achieves $350,000 in first quality, running line purchases (excluding promotional products and special purchases) through the Floors To Go System within the first twelve months (starting 90 days after membership begins). In such cases, Floors To Go will refund all payments made for the Initial Membership Fee on or after the fifteenth month of membership. Floors To Go may also offer promotions that credit against Initial Membership Fees for a limited time.