31 Substantial Fees Every Footprints Floors Franchisee Needs to Know About

Detailed Information on Footprints Floors’ Initial Franchise Fee, Royalty Fee + 29 Other Fees (Items 5 and 6, 2021 FDD)

1.  Initial Franchise Fee:  $62,000

• The initial franchise fee (“Initial Franchise Fee”) for a single Footprints Floors Business is $62,000. You will operate one Footprints Floors Business for each Franchise Agreement you sign.

• The Initial Franchise Fee is uniform, payable when you sign your Franchise Agreement, and is nonrefundable.

2.  Franchise Starter Package:  $1,080

• All franchisees must purchase a franchise starter package (“Franchise Starter Package”) of startup items from Footprints Floors for $1,080.

• The Franchise Starter Package will include one laser measuring device, $200 in apparel credit to Footprints Floors’ designated online apparel storefront, initial marketing materials, business cards, proposal forms, and estimate notepads.

• You will receive the Franchise Starter Package at initial training. The Franchise Starter Package payments are uniform, non-refundable, and due when you sign the Franchise Agreement.

3.  Multi-Franchise Rights:  $102,000 to $176,000

• You will sign Footprints Floors’ Multi-Franchise Addendum if you purchase multiple Franchises at the same time.

• To open additional Footprint Floors Franchises under the Multi-Franchise Addendum, you must sign the then-current Footprints Floors Franchise Agreement when you are ready to open the next Footprint Floors Business, but you will not be required to pay an additional Initial Franchise Fee (all other fees will apply).

• You must pay Footprints Floors the Initial Franchise Fee corresponding to the number of Footprints Floors Businesses you purchase when you sign the Franchise Agreement for the first Footprints Floors Franchise.

• The Initial Franchise Fee is uniform, fully earned by Footprints Floors once paid, and is non-refundable, even if you do not open additional Footprints Floors Franchises.

• Multi-2 (Up to 2 Footprints Floors Businesses): $102,000
• Multi-3 (Up to 3 Footprints Floors Businesses): $140,000
• Multi-4 (Up to 4 Footprints Floors Businesses): $176,000

4.  Royalty:  6% of Gross Sales per month during the first three months of operation; the greater of 6% of Gross Sales or the minimum royalty (“Minimum Royalty”) beginning on the fourth month of operation and continuing during the remaining years of the initial and any successor term of the Franchise Agreement. The Minimum Royalty per month per franchise ranges from $500 (1st year of operation) to $2,000 (7th and subsequent years of operation).

• Due Date:  Due on the 10th day of each month.

5.  Brand Fund Contribution:  not currently charged

• Due Date:  Same as Royalty.

• Footprints Floors reserves the right to establish a system-wide “Brand Fund” for its use in promoting and building the Footprints Floors brand and require a Brand Fund contribution of the greater of 2% of Gross Sales or $500 per month.

6.  Local Advertising Payment:  the difference between the amount you spent on local advertising each month in the territory, and your required local advertising expenditure ($750 per month)

• Due Date:  Payable after receipt of invoice.

• If you fail to meet your required local advertising requirement on local advertising in the territory, you must pay Footprints Floors the difference between the amount you spent and the required advertising expenditure, which will be contributed to the Brand Fund, if established, or paid to Footprints Floors.

7.  Local and Regional Advertising Cooperatives:  established by cooperative members

• Due Date:  Established by cooperative members.

• Footprints Floors currently does not have a cooperative, but reserves the right to require one to be established in the future.

8.  Unauthorized Advertising Fee:  $500 per occurrence

• Due Date:  On demand.

• This fee is payable to Footprints Floors or, if established, the Brand Fund, if you use unauthorized advertising in violation of the terms of the Franchise Agreement.

9.  Insurance:  reimbursement of Footprints Floors’ costs, plus a 20% administration charge

• Due Date:  On demand.

• If you fail to obtain insurance, Footprints Floors may obtain insurance for you, and you must reimburse Footprints Floors for the cost of insurance obtained plus 20% of the premium as an administrative cost of obtaining the insurance.

10.  Additional Training or Assistance Fees:  then-current fee; currently, $500 per additional person per day for initial training and approximately $300 per attendee per day for additional training

• Due Date:  As incurred.

• Footprints Floors provides initial training at no charge for up to 2 people (provided they attend at the same time), including you (or your operating principal if you are an entity) and any designated manager.

• Footprints Floors may charge you for training additional persons, newly-hired personnel, refresher training courses, advanced training courses, and additional or special assistance or training you need or request.

11.  Call Center and Scheduling Services Fee:  then-current fee (currently 2% of Gross Sales per month)

• Due Date:  Same as Royalty.

• Footprints Floors provides certain managed services for the franchisees such as reception of incoming calls, scheduling of appointments, maintenance of estimators’ calendars, appointment reminder calls, and administrative assistance with appointments.

12.  Technology Fee:  then-current fee (currently $250 per month), plus fees of up to $175 per month, per employee of yours for additional technology services

• Due Date:  Same as Royalty.

• This fee is for website hosting services, franchise management systems, future web-based system integration, and for other technology-related services (“Technology Fee”) and provides a platform for you.

• You must pay for additional technology services at a fee of up to $175 per month, per employee.

• These fees are collected by Footprints Floors and paid to third-party providers of these services.

13.  Managed Website Services Fees:  then-current fee (currently $500 per month)

• Due Date:  Same as Royalty.

• Footprints Floors has made arrangements for preferred pricing for SEO web services. This fee includes access to SEO and related web services (“Managed Website Services Fee”).

• This fee is collected by Footprints Floors and paid to third-party providers of these services.

14.  Convention Fee:  then-current fee (currently estimated to be $400 for the first person and $100-$300 per guest depending on which parts of the convention each person attends)

• Due Date:  On demand.

• Payable to Footprints Floors to help defray the cost of your attendance at any annual convention that Footprints Floors chooses to hold.

• The fee for your attendance is due regardless of whether or not you attend Footprints Floors’ annual convention in any given year.

• You are responsible for all travel-related expenses that you and your attendees incur.

15.  Supplier and Product Evaluation Fee:  costs of inspection (estimated to be approximately $100 to $500)

• Due Date:  As incurred.

• Payable if Footprints Floors inspects a new product, service, or proposed supplier nominated by you.

16.  Replacement of Franchise Operations Manual:  $500

• Due Date:  On demand.

• Payable if your physical copy of the franchise operations manual is lost, destroyed, or significantly damaged.

17.  Customer/Warranty Issue Resolution:  the reasonable costs Footprints Floors or another Footprints Floors franchisee incurs for responding to a customer complaint or warranty issue

• Due Date:  After receipt of invoice.

• Payable if a customer of your Footprints Floors Business contacts Footprints Floors with a complaint or warranty issue and Footprints Floors provides a refund or other value to the customer as part of Footprints Floors addressing the issue, or if Footprints Floors or another Footprints Floors franchisee is required to correct or redo the work performed by you.

• In these circumstances, you must reimburse Footprints Floors (in which case the amount reimbursed may be placed in the Brand Fund, if established) or the provider of services for these amounts.

18.  Payment Service Fee:  up to 4% of total charge

• Due Date:  As incurred.

• If payment is made to Footprints Floors or its affiliates by credit card for any fee required, Footprints Floors may charge a service charge of up 4% of the total charge.

19.  Late Payment Fee:  $100 per occurrence, plus the lesser of the daily equivalent of 12% per year simple interest or the highest rate allowed by law

• Due Date:  As incurred.

• Payable if any payment due to Footprints Floors or its affiliates is not made by the due date. Interest accrues from the original due date until payment is received in full.

20.  Non-Sufficient Funds Fee:  the lesser of $100 per occurrence, or the highest amount allowed by law

• Due Date:  As incurred.

• Payable if any check or electronic funds transfer payment is not successful due to insufficient funds, stop payment, or any similar event.

21.  Failure to Submit Required Report Fee:  $100 per occurrence and $100 per week

• Due Date:  Your bank account will be debited for failure to submit any requested report within 5 days of request.

• Payable if you fail to submit any required report or financial statement when due.

• Fines collected are paid to the Brand Fund, if established, or Footprints Floors.

• You will continue to incur this fee until you submit the required report.

22.  Audit Expenses:  cost of audit and inspection, any understated amounts, any related accounting and legal expenses, and the travel-related expenses and compensation of Footprints Floors’ employees (Footprints Floors estimates this cost to be between $1,000 and $12,000)

• Due Date:  On demand.

• You will be required to pay this if an audit reveals that you understated Gross Sales by more than 2% or you fail to submit required reports.

23.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must indemnify and reimburse Footprints Floors for any expenses or losses that it or its representatives incur related in any way to your Footprints Floors Business or Franchise.

24.  Management Fee:  $200 per day, plus costs and expenses

• Due Date:  As incurred.

• Payable if Footprints Floors manages the Footprints Floors Business because you are in breach of the Franchise Agreement.

25.  Professional Fees and Expenses:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Footprints Floors for any legal or accounting fees that it incurs as a result of any breach or termination of your Franchise Agreement.

• You must reimburse Footprints Floors if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.

26.  Renewal Fee:  10% of the then-current Initial Franchise Fee

• Due Date:  At the time you sign the new Franchise Agreement.

• Payable if you qualify to renew your Franchise Agreement and choose to enter into a successor Franchise Agreement. If Footprints Floors is not offering franchises at the time of your renewal, the renewal fee will be 10% of the initial franchisee fee listed in the most recent Franchise Disclosure Document.

27.  Transfer Fee:  $8,000

• Due Date:  $1,000 nonrefundable deposit at time of transfer application submittal and the remaining balance of fee at the signing of the approved transfer.

• Payable in connection with the transfer of your Footprints Floors Business, a transfer of ownership of your legal entity, or the Franchise Agreement.

28.  Relocation Fee:  Footprints Floors’ costs

• Due Date:  Upon relocation.

• You must reimburse Footprints Floors for its reasonable expenses if it permits you to relocate your Footprints Floors Business.

• Footprints Floors will provide you with copies of its invoices for its expenses from any third-party providers upon request.

29.  Transfer Fee:  15% of the then-current Initial Franchise Fee

• Due Date:  $1,000 nonrefundable deposit at time of transfer application submittal and the remaining balance of fee at time of the approved transfer.

• Payable in connection with the transfer of your Footprints Floors Business, a transfer of ownership of your legal entity, or the Franchise Agreement.

• If you are transferring your Footprints Floors Business to an entity that you control, you will only be responsible for Footprints Floors’ actual expenses.

30.  Liquidated Damages:  will vary under the circumstances

• Due Date:  Within 15 days after termination of the Franchise Agreement.

• Due only if Footprints Floors terminates the Franchise Agreement before the end of the term because of your material breach, or you terminate the Franchise Agreement without legal cause.

31.  Broker Fees:  Footprints Floors’ actual cost of the brokerage commissions, finder’s fees, or similar charges

• Due Date:  As incurred.

• If you transfer your Footprints Floors Business to a third party or purchaser, you must reimburse all of Footprints Floors’ actual costs for commissions, finder’s fees, and similar charges.