What is the purpose of the Advertising Fees paid by Floors To Go franchisees?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
vice Fee from time to time consistent with changes in the demands of the FTG System, and you agree to pay such an increased or decreased Service Fee.
6.4. Advertising Fee.
- a. In order to promote your membership in Your Territory, an annual advertising fee (the "Advertising Fee") of $3,000.00 is payable semiannually, in two equal payments of $1,500.
- b. You will not be responsible for the Advertising Fee for the first three (3) months following the Effective Date of this Agreement. The Advertising Fee payable for the first year of this Agreement shall be prorated accordingly.
- c. All Advertising Fees paid by you shall be used solely for the development and production of advertising programs and materials to promote the products and services provided by FTG members to their customers. All Advertising Fees paid by you are for system-wide use and will not be used for marketing individual showrooms. These programs and materials may, as available funds permit, include, but not be limited to, instore point-of-purchase displays, customizable direct mail materials, customizable newspaper and print advertising materials, customizable radio script packages, customizable television commercial packages, and focused multi-media promotions.
- d. We reserve the right to reasonably and uniformly increase or decrease the Advertising Fee from time to time consistent with changes in the advertising needs of the FTG System, and you agree to pay such an increased or decreased Advertising Fee.
- 6.5. Brokerage Fee. You are not responsible for any brokerage fees due to us from manufacturers or vendors participating in the FTG System. You agree to authorize merchandise vendors and manufacturers to inform us of the amount of goods you purchased through the FTG System.
- 6.6. Renewal Fee. Upon renewal of this Agreement pursuant to Section 2.1 above, we will charge you a modest renewal fee of $750.
- 6.7. Transfer Fee. We charge a $5,000 transfer fee if the membership and the rights under this Agreement are transferred in any way. However, no transfer fee will be charged if you assign your membership under this Agreement in connection with a reorganization that does not result in an actual change of your ultimate beneficial ownership or if the transfer is to heirs upon your death or disability.
- 6.8. Interest on Late Payment.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go FDD, the annual Advertising Fee is used to promote a franchisee's membership within their territory. The annual Advertising Fee is $3,000, payable in two semiannual installments of $1,500. Floors To Go specifies that these fees will be used solely for the development and production of advertising programs and materials designed to promote the products and services offered by Floors To Go members to their customers.
Floors To Go clarifies that the Advertising Fees are intended for system-wide use and will not be used for marketing individual showrooms. The advertising programs and materials this fee supports may include in-store displays, customizable direct mail, newspaper and print advertising, radio script packages, television commercial packages, and multi-media promotions, contingent on available funds.
Floors To Go retains the right to adjust the Advertising Fee periodically based on the advertising needs of the Floors To Go system. However, franchisees are not responsible for the Advertising Fee for the first three months after the franchise agreement's effective date, with the first year's fee being prorated accordingly. This provides a temporary financial relief for new franchisees as they establish their business.
For administrative purposes, Floors To Go manages the Advertising Fees, creates advertising materials, and can provide local or regional advertising placement services for an additional fee, capped at 15% of the advertising cost. This structure ensures that advertising efforts are coordinated and aligned with the overall brand strategy, while also offering franchisees the option to customize their advertising approach with Floors To Go's support.