What is the range of the early termination fee for Floors To Go?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks(1) |
|---|---|---|---|
| Early Termination Fee | $20,000 to $50,000 | Upon early termination of the Membership Agreement | If the Membership Agreement is terminated prior to completion of the initial five-year term, you will reimburse us for the costs associated with the Redesign of your Showroom. (8) |
FTG will cover these costs of the Redesign (i.e., non-tenant-improvement-item costs); however, if your Membership Agreement is terminated prior to completion of the initial fiveyear term, you must pay FTG an early termination fee equal to the amount associated with the Redesign of your Showroom less 20% for each full year from the effective date of your Membership Agreement that you remained a member (the "Early Termination Fee").
For example, if you became a member on March 1, 2025, and the cost of your Redesign was $30,000, and your membership was terminated on January 1, 2028, you would owe us a cash payment equal to $18,000 ($30,000 – [$30,000 X (20% x 2) = $12,000] = $18,000).
The Early Termination Fee shall be due and payable to FTG in cash immediately on the date of any such early termination.
You will not be required to repay any portion of the cost to Redesign your Showroom if you remain a FTG member for the entire initial five-year term.
Source: Item 6 — OTHER FEES (FDD pages 12–14)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, the early termination fee ranges from $20,000 to $50,000. This fee is applicable if the Membership Agreement is terminated before the initial five-year term is completed. The fee serves as reimbursement for the costs associated with the Redesign of the franchisee's showroom.
However, the FDD also explains that the early termination fee is calculated based on the cost of the showroom redesign, less 20% for each full year the franchisee remained a member from the Membership Agreement's effective date. For instance, if a franchisee terminates their agreement after two full years and the redesign cost $30,000, the early termination fee would be $18,000. This is calculated by deducting $12,000 (20% x 2 years x $30,000) from the initial $30,000 redesign cost.
It's important to note that a franchisee will not be required to repay any portion of the redesign cost if they remain a Floors To Go member for the entire initial five-year term. The early termination fee is due in cash immediately upon the date of early termination. This fee structure is tied to the showroom redesign costs initially covered by Floors To Go, incentivizing franchisees to complete their initial term.