What does Floors To Go state is affected by the estimates and assumptions made by management?

According to Floors To Go's 2025 Franchise Disclosure Document, the company's financial statements are affected by the estimates and assumptions made by its management. Specifically, these estimates and assumptions impact the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements. They also affect the reported amounts of income and expenses during the reporting period.

Floors To Go clarifies that actual results could differ from these estimates. One significant estimate mentioned in the document is related to the franchisee cashback program accruals. This means that the financial statements rely on management's judgment regarding the expected payouts or liabilities associated with this program.

For a prospective franchisee, this disclosure highlights the inherent uncertainty in financial reporting. While the financial statements are prepared according to generally accepted accounting principles, they are not a guarantee of future performance. The franchisee cashback program, being a significant estimate, could potentially impact the company's profitability and financial position. Therefore, it is important for potential franchisees to understand the assumptions behind these estimates and how they might affect the overall financial health of Floors To Go.