What is the range of the early termination fee for a Floors To Go franchise, and when is it due?
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 Floors To Go's 2025 Franchise Disclosure Document, the early termination fee ranges from $20,000 to $50,000. This fee is incurred if the Membership Agreement is terminated before the initial five-year term is complete. The fee is designed to reimburse Floors To Go for the costs associated with the Redesign of the franchisee's showroom.
The early termination fee is due immediately upon the early termination of the Membership Agreement. However, the exact amount owed depends on how long the franchisee remained a member before terminating. The fee is reduced by 20% for each full year from the effective date of the Membership Agreement that the franchisee remained a member. This means that the longer a franchisee operates the Floors To Go franchise before terminating, the lower the early termination fee will be.
For example, if the Redesign cost was $30,000 and the franchise agreement was terminated after 3 years, the franchisee would owe $18,000. This is calculated by reducing the initial $30,000 cost by 20% for each of the 2 full years the franchisee operated (20% x 2 = 40%), resulting in a $12,000 reduction ($30,000 x 40% = $12,000). The remaining balance due would be $18,000 ($30,000 - $12,000 = $18,000). If a franchisee remains a Floors To Go member for the entire initial five-year term, they will not be required to repay any portion of the Redesign cost.