Five Star Flooring
Five Star Flooring offers franchises for flooring installation, replacement, and renovation services. Known for quality service marks and programs, it operates in the home improvement and flooring industry.
Five Star Flooring franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a single FIVE STAR FLOORING franchise ranges from $68,500 to $157,500. This amount includes essential costs and is subject to additional fees as specified in Item 5 for multi-location Executive Models. [p.1]
What is the initial franchise fee?
The initial franchise fee covers sales expenses, administrative overhead, return on investment, start-up costs, and lost or deferred opportunity to sell franchises in the Franchise Territory. It is paid upon execution of the Franchise Agreement and is uniform unless increased after certain growth levels are attained [p.13, p.14]. This fee will be deferred until the franchisor fulfills its pre-opening obligations and the franchise is open for business in states like Maryland [p.199], while in Washington, it may also be deferred based on state conditions [p.205].
What are the ongoing royalty and advertising fees?
The franchisee must pay minimum royalties and advertising fund payments regardless of sales levels [p.5]. These payments are required even if the franchise does not meet certain revenue targets, with adjustments potentially needed to cover the difference between actual and expected royalties [p.48, p.50].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement does not specify an exact term length [p.153]. However, you may renew the franchise for periods of 10 years under the terms of the then-current Franchise Agreement forms if you are not in breach or default [p.153].
Can I sell or transfer my franchise, and what does that require?
You must notify the franchisor in writing before selling or transferring any interest in your franchise business. The franchisor will have a right of first purchase within 60 business days after receiving your notification and due diligence information. You are also required to comply with all criteria set forth in the 'Sale or Assignment' section, which includes obtaining the franchisor's consent except for good cause. [p.162]
On what grounds can the franchisor terminate the agreement?
According to [p.203] and [p.199], a franchisor can terminate an agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the Franchise Agreement. This termination can occur prior to the expiration of the term of the franchise.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The provided FDD excerpts focus on ongoing expenses and initial investment escrow but do not detail specific financial requirements such as net worth or liquid capital needed for qualification.
Do I get an exclusive or protected territory?
Yes, you receive an exclusive territory [p.48]. As long as you comply with the terms of the franchise agreement and meet certain minimum annual revenue targets, the company will not establish another FIVE STAR FLOORING business within your designated territory. However, failing to meet these revenue targets could result in a reduction of your territory size [p.148].
What training and ongoing support does the franchisor provide?
The franchisor provides standards, ongoing training, and ongoing support [p.144]. Additionally, anyone managing or leading operations at the franchise must complete the required training course [p.142].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations other than the one provided in Item 19 of the FDD. If a prospective franchisee receives any other financial performance information, they should report it to the franchisor's management and relevant regulatory agencies as specified [p.61].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only those services or products that meet the specifications and standards of quality and quantity as outlined in the Operations Manual [p.145]. You must sell all approved items and refrain from deviating from the franchisor's standards [p.145]. Regarding supplies, you may have to buy or lease certain items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options [p.4].