What were the 'Management fees - related party' expenses for Floors To Go in 2024?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
elated costs on the statements of income. Such costs totaled $261,790 and $259,435 in 2024 and 2023, respectively.
Subsequent Events
In preparing these financial statements, management has evaluated, for potential recognition or disclosure, significant events or transactions that occurred during the period subsequ
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 had management fees with a related party totaling $800,000 in 2024. These fees were charged by an affiliated company wholly-owned by Floors To Go's member. The fees covered accounting and management services, including the use of space and equipment at the corporate headquarters.
For a prospective franchisee, this indicates that Floors To Go relies on related-party transactions for essential services. Understanding the nature and terms of these related-party transactions is crucial. While the FDD discloses the total amount of these fees, it does not detail the specific services provided or the basis for determining the fee amount.
It is important to note that related-party transactions can present potential conflicts of interest. While not inherently problematic, they warrant careful scrutiny to ensure that the terms are fair and reasonable. A potential franchisee should consider asking Floors To Go for more detailed information about the services covered by these management fees and how the fees are determined to ensure transparency and fairness.
Franchisees should also confirm that these fees are consistent with industry standards and that they are receiving appropriate value for the services provided. Investigating the related company providing the services and its qualifications can also provide additional assurance.