What is the purpose for which Advertising Fees paid by Floors To Go franchisees will be used?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
G received from its members during fiscal year 2024 were used to solicit new franchise sales.
All Advertising Fees paid by you will be used solely for the development of advertising materials and marketing programs for system-wide use and will not be used for marketing individual showrooms or to defray any of FTG's expenses not directly related to the development of these materials and programs. Members, including company-owned outlets, are required to pay Advertising Fees (payable semi-annually, in two equal payments of $1,500). Members are not required to participate in any other advertising fund. FTG will direct all programs financed by the Advertising Fees, with sole discretion over the creative concepts, materials and endorsements used, market and media selection (including whether the corresponding media coverage is local, regional or national in scope), and the allocation of resources. Advertising Fees may, in FTG's sole discretion, be used to pay the costs for preparing and producing customizable artwork, print media, television and radio commercials, as well as for conducting market research, public relations, and paying FTG's related administrative expenses.
FTG will have absolute discretion with the administration of the funds received as Advertising Fees, including but not limited to, the allocation of the funds, methods of payment, and reimbursement of expenses and advances paid by FTG to develop any such advertising materials or programs. The Advertising Fees and earnings, if any, will not otherwise inure to FTG's benefit, and FTG will maintain separate bookkeeping accounts for these Advertising Fees.
There is currently no advertising council composed of members that advise FTG on advertising policies. Members are not presently required to participate in a local or regional advertising cooperative.
Upon your request, we will provide you with a statement setting forth an accounting of our advertising expenditures. However, FTG is not responsible for, nor will FTG assume any direct or indirect liability or obligation to you with respect to, having independent certified public accountants conduct a separate audit on the receipt and disbursement of the Advertising Fees that FTG receives from its members.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 22–27)
What This Means (2025 FDD)
According to the 2025 Floors To Go FDD, the advertising fees paid by franchisees are designated for specific purposes related to system-wide advertising and marketing. These fees are intended for the development of advertising materials and marketing programs that benefit the entire Floors To Go system, rather than individual showrooms. The FDD specifies that these fees will not be used for marketing individual showrooms or to cover Floors To Go's general expenses unrelated to these advertising initiatives.
Floors To Go has complete discretion over how the advertising funds are managed, including decisions about creative concepts, materials, endorsements, market and media selection, and resource allocation. The fees can be used to cover the costs of producing customizable artwork, print media, television and radio commercials, as well as for market research, public relations, and related administrative expenses. Floors To Go commits to maintaining separate bookkeeping accounts for these advertising fees, ensuring that the funds are used appropriately.
For franchisees, this means that the $1,500 semi-annual advertising fee contributes to a broader marketing strategy managed by Floors To Go. While franchisees do not have direct control over the use of these funds, they benefit from system-wide advertising efforts designed to enhance the Floors To Go brand and attract customers. The FDD also clarifies that franchisees are not required to participate in any other advertising fund, providing some cost certainty in terms of advertising contributions. Additionally, Floors To Go states that in fiscal year 2024, 100% of advertising fees were used for production and media placement expenses, and none were used to solicit new franchise sales.