How is the remaining balance of the Floors To Go initial membership fee paid?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
IAL FEES**
A. Single Showroom Membership
As a new member, you will be charged an Initial Membership Fee of $10,000. This fee is payable as follows: (a) $1,000 is paid at the time your Membership Agreement is signed; and (b) the remaining $9,000 is paid through the FTG CashBack Program (described below) whereby you will grant FTG the right to retain all proceeds allocable to you from the FTG CashBack Program up to the $9,000 amount or for a five-year time period, whichever occurs first (referred to hereafter as the "CashBack Participation"). If the CashBack Participation does not generate proceeds to FTG of $9,000, whatever lesser amount of proceeds is collected by FTG over the five-year participation period on your behalf will be deemed payment in full for your Initial Membership Fee. If your Membership Agreement is terminated prior to completion of the initial five-year term, the remaining balance of the Initial Membership Fee shall be due and payable by you to us in cash immediately upon the date of any such termination.
The FTG CashBack Program consists of various floor covering and window treatment manufacturers offering CashBack incentives for the purchase of selected floor covering and window treatment products. When you purchase such selected carpets and/or floor coverings you will be credited with a cash rebate based upon a percentage of the selected carpets and/or floor coverings purchased. These percentages range up to 8% of the purchase price of selected items. Such cash rebates will be paid to FTG on your behalf when you earn such CashBack incentives. FTG will hold such funds, without liability for interest, and after verification of amounts received, and after setting off any amounts that you owe to FTG, will distribute such funds to you annually or semi-annually. You are eligible to participate in the FTG CashBack Program and will be notified on a regular basis of qu
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, the initial membership fee for a single showroom is $10,000. A franchisee pays $1,000 when signing the Membership Agreement. The remaining $9,000 is covered through the FTG CashBack Program. Floors To Go retains the franchisee's proceeds from this program until the $9,000 is paid or for a maximum of five years, whichever comes first. If the CashBack Participation does not generate $9,000 within five years, the lesser amount collected is considered full payment of the initial membership fee.
The FTG CashBack Program involves floor covering and window treatment manufacturers that offer cash back incentives on selected products. When a Floors To Go franchisee purchases these selected items, they receive a cash rebate, up to 8% of the purchase price. These rebates are paid to Floors To Go on behalf of the franchisee. Floors To Go holds these funds without interest, verifies the amounts, and after deducting any amounts the franchisee owes to Floors To Go, distributes the remaining funds to the franchisee annually or semi-annually. Franchisees are regularly notified of qualifying CashBack items.
If a Floors To Go Membership Agreement is terminated before the initial five-year term, the franchisee must immediately pay the remaining balance of the initial membership fee in cash. This condition highlights the importance of understanding the terms of the Membership Agreement and the potential financial implications of early termination. Prospective franchisees should carefully consider their ability to meet the purchase requirements and participate effectively in the CashBack program to avoid having to pay the remaining balance in cash upon early termination.