What are the primary sources of revenue for Floors To Go?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenues are primarily derived from service fees, member advertising fees, and brokerage fees from certain floor and window covering manufacturers utilized by the franchisees. The performance obligation related to these services is met over the terms of the franchise agreement. In certain circumstances fees collected are deferred and recognized over time as the related performance obligations are satisfied.
We identified the following services as one performance obligation in connection with the franchise contracts:
- Intellectual Property (IP) license to the Company's programs, registered trademarks and name.
- Service fees are monthly charges for training and other support services recognized when invoiced.
- Member advertising fees consist of annual charges for advertising and marketing materials.
The Company also recognizes a portion of revenue from the sale of franchisee licenses at the time a contract between the Company and the franchisee is executed; additional license revenue is received in installments over a period of up to five years. The performance obligation related to the sale of a franchisee license is met over the terms of the franchise agreement.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, the company's revenues are primarily derived from several sources. These include service fees, which are monthly charges for training and other support services invoiced to franchisees. Floors To Go also collects member advertising fees, consisting of annual charges for advertising and marketing materials. Additionally, the company earns brokerage fees from certain floor and window covering manufacturers utilized by the franchisees.
Floors To Go also generates revenue from the sale of franchise licenses. A portion of this revenue is recognized at the time the franchise agreement is executed, with the remaining license revenue received in installments over a period of up to five years. The performance obligation related to the sale of a franchisee license is met over the terms of the franchise agreement.
For a prospective franchisee, understanding these revenue streams is crucial as it highlights how Floors To Go sustains its operations and provides support services. The reliance on fees from franchisees and manufacturers indicates the importance of maintaining strong relationships and providing valuable services to both parties. The installment-based revenue from franchise licenses suggests a long-term commitment to supporting new franchisees over several years.