In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Floor Coverings International franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Floor Coverings International franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Floor Coverings International outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Floor Coverings International franchise opportunity

Section V – Presentation and analysis of Floor Coverings International’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average gross revenue installed, gross revenue landed, leads, proposals, job size, success rate, slippage rate, and gross margin % for the top 10%, top 25%, top 50%, bottom 50%, bottom 25%, bottom 10%, and all 138 Floor Coverings International franchisees that were open and operating for more than 24 months as of December 31, 2023 and for whom Floor Coverings International has complete sales data

• 2023 average job size, success rate, slippage rate, and gross margin % for the 88 Floor Coverings International franchisees that were open and operating for less than two years but more than one year, and 138 Floor Coverings International franchisees that were open and operating for more than 24 months as of December 31, 2023 and for whom Floor Coverings International has complete sales data

Section VI – Key ratios, comparables, computations, and analyses for the Floor Coverings International franchise opportunity (exclusive content for Platinum subscribers)

Section I – Floor Coverings International Franchise Costs

• Floor Coverings International franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $53,000
• Inspirenet/Inspirenet Mobile Software:  $7,500
• Software Access Fee (2 months):  $450 to $800
• Training Related Expenses:  $4,000 to $6,000
• Opening Package:  $40,000 to $50,000
• Personnel/Staffing:  $2,500 to $5,000
• Initial Advertising Expenses:  $40,000 to $60,000
• Insurance (Liability/Vehicle):  $2,500 to $6,000/year
• Miscellaneous Opening Costs:  $2,000 to $5,000
• FCI Vehicle:  $1,400 to $1,700
• Office Equipment:  $2,000 to $5,000
• Real Estate and Improvements:  $5,000 to $8,500
• Additional Startup Funds (6 months):  $20,000 to $35,000
• Total Estimated Floor Coverings International Franchise Costs:  $180,350 to $243,500

Section II – Floor Coverings International’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Floor Coverings International’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $53,000
• Continuing Royalty Fee:  the greater of 5% of Gross Sales or $833 per month in your first 12 months of operations (whole or partial), $1,250 per month for months 13 through 24 of operations, or $1,667 per month thereafter (Minimum Royalties)
• Brand Fund Contribution (“Advertising Contribution”):  3% of Gross Sales
• Local Advertising:  a minimum of 6% of Gross Sales
• Regional Advertising and Promotional Cooperative (“Cooperative”) Contribution:  if applicable, the then-current fee as determined by the Cooperative; currently, no more than 2% of Gross Sales

Section III – Number of Franchised and Company-Owned Floor Coverings International Outlets

Franchised

2021

• Outlets at the Start of the Year:  171
• Outlets at the End of the Year:  197
• Net Change:  +26

2022

• Outlets at the Start of the Year:  197
• Outlets at the End of the Year:  215
• Net Change:  +18

2023

• Outlets at the Start of the Year:  215
• Outlets at the End of the Year:  252
• Net Change:  +37

Company-Owned

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2023

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section IV – News Updates on the Floor Coverings International Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Floor Coverings International Franchise (Item 19, 2024 FDD)

• This Item sets forth certain historical data submitted by Floor Coverings International franchisees.

• As set forth in each table below, this Item discloses certain information for each of the Reporting Franchisees, and not for discrete businesses or territories. Some Reporting Franchisees may own more than one business and/or operate in more than one territory.

• Floor Coverings International has not audited this information, nor independently verified this information.

• The information is for the period of January 1, 2023 through December 31, 2023 (the “Measurement Period”).

• This Item presents certain information for Floor Coverings International’s 237 U.S. franchisees that were open for the full Measurement Period, and excludes information from 11 franchisees that were not (i) open for the full measurement period, (ii) do not report using Floor Coverings International’s current standard software, or use it inconsistently, and thus for whom Floor Coverings International does not have complete sales data, or (ii) do not operate the franchise as a full-time venture.

Part 1 – Gross Revenue Produced, Gross Revenue Landed, and Average Job Information

• This table presents the Gross Revenue Installed, Gross Revenue Landed, and certain Job Information as reported to Floor Coverings International by its 138 U.S. franchisees that were open and operating for more than 24 months as of December 31, 2023 and for whom Floor Coverings International has complete sales data (the “Reporting Franchisees”).

• This table excludes franchises (a) who had not been open and operating for a full 24 months as of December 31, 2023, (b) for whom Floor Coverings International does not have complete sales data, and (c) that do not operate the franchise as a full time venture.

• For the purposes of this Item 19, a franchisee is deemed to have operated less than full time if the franchisee was not operating for at least one full calendar month during the Measurement Period.

• Data for startup franchisees who were not open and operating for a full 24 months as of December 31, 2023 was excluded from this table.

• The following table presents the average Gross Revenue Installed, Gross Revenue Landed, and certain Job Information for the 138 Reporting Franchisees during the Measurement Period. Floor Coverings International has broken down the data into five groups (each, a “Group”) based on the Reporting Franchisees’ Gross Revenue Installed, as further described below.

Top 10%

• Number of Reporting Franchisees:  13
• Average Gross Revenue Installed:  $3,061,842
• Average Gross Revenue Landed:  $3,304,408
• Leads:  1,422
• Proposals:  765
• Average Job Size:  $8,372
• Success Rate:  54%
• Slippage Rate:  43%
• Gross Margin %:  45%

Top 25%

• Number of Reporting Franchisees:  34
• Average Gross Revenue Installed:  $2,068,116
• Average Gross Revenue Landed:  $2,200,359
• Leads:  1,179
• Proposals:  566
• Average Job Size:  $8,737
• Success Rate:  46%
• Slippage Rate:  49%
• Gross Margin %:  46%

Top 50%

• Number of Reporting Franchisees:  69
• Average Gross Revenue Installed:  $1,504,152
• Average Gross Revenue Landed:  $1,589,983
• Leads:  1,085
• Proposals:  466
• Average Job Size:  $8,133
• Success Rate:  41%
• Slippage Rate:  54%
• Gross Margin %:  45%

Bottom 50%

• Number of Reporting Franchisees:  69
• Average Gross Revenue Installed:  $550,745
• Average Gross Revenue Landed:  $598,368
• Leads:  587
• Proposals:  230
• Average Job Size:  $7,355
• Success Rate:  39%
• Slippage Rate:  56%
• Gross Margin %:  45%

Bottom 25%

• Number of Reporting Franchisees:  34
• Average Gross Revenue Installed:  $416,830
• Average Gross Revenue Landed:  $446,372
• Leads:  511
• Proposals:  193
• Average Job Size:  $6,892
• Success Rate:  39%
• Slippage Rate:  55%
• Gross Margin %:  45%

Bottom 10%

• Number of Reporting Franchisees:  13
• Average Gross Revenue Installed:  $292,429
• Average Gross Revenue Landed:  $313,355
• Leads:  388
• Proposals:  144
• Average Job Size:  $6,357
• Success Rate:  37%
• Slippage Rate:  54%
• Gross Margin %:  44%

All Reporting Franchisees

• Number of Reporting Franchisees:  138
• Average Gross Revenue Installed:  $1,027,449
• Average Gross Revenue Landed:  $1,094,175
• Leads:  836
• Proposals:  348
• Average Job Size:  $7,744
• Success Rate:  40%
• Slippage Rate:  55%
• Gross Margin %:  45%

• Gross Revenue Installed is defined as a franchisee’s total sales invoices or other items or services billed to the customer for all “Completed Sales”, less discounts, cancellations, or returns by Floor Coverings International. Sales of products and services are deemed to be Completed Sales for purposes of reporting to Floor Coverings International when the franchisee completes the final installation of all products or services sold to the customer.

• Gross Revenue Landed is defined as Gross Revenue Installed (except as set forth below), plus the total sales invoices or services billed to customers for all ongoing jobs where franchisee has not yet completed final installation but has been engaged by the customer and has begun to provide the products and services requested. Specifically omitted from Gross Revenue Landed is any amount of Gross Revenue Installed from the provision of products or services which were ordered, invoiced, or first billed for during the preceding calendar year (2022).

• Leads are all inquiries that the franchisee received from potential customers to provide the approved products and services.

• Proposals is the number of estimates, bids, and other proposals generated and delivered by a franchisee to provide products and/or services to customers.

• Average Job Size is defined as the total Gross Revenue Installed of all jobs in each operating category divided by the number of jobs performed by franchisees in each operating category.

• Average Success Rate is the average percentage of jobs landed over the number of first proposals.

• Average Slippage Rate is the average percentage of Proposals over the number of Leads.

• Gross Margin is the percentage of profit in the jobs performed by franchisees, which is calculated by subtracting product and installation costs from revenue, dividing the result by revenue, and converting into a percentage.

• As of December 31, 2023, 12 Reporting Franchisees operated in two or more discrete territories, and over 100 franchisees operate outside of their territories in areas that in many cases are as large as, or larger than, the total area served by franchisees operating in two separate territories.

• Certain Reporting Franchisees have been granted the right to perform services for residential jobs in which the aggregate contract amount exceeds $50,000, or any other flooring services not specifically identified as Residential Services in the disclosure document, including but not limited to any flooring services for businesses or other commercial buildings, hotels, or academic institutions (“Commercial Services”).

• Upon signing Floor Coverings International’s Commercial Services Addendum, completion of Floor Coverings International’s Commercial Training Program, and satisfaction of such other conditions as Floor Coverings International may require, you will be qualified to provide Commercial Services.

Part 2 – Certain Job Information for Start-Up and Mature Businesses

• The following table presents the Average Job Size, Success Rate, Slippage Rate, and Gross Margin for 88 of Floor Coverings International’s franchisees open less than two years but more than one year, and 138 of Floor Coverings International’s franchisees open and operating for more than two years, as of December 31, 2023, that reported data in these categories to Floor Coverings International.

• This table excludes franchises (a) who had not been open and operating for a full year as of December 31, 2023, (b) for franchisees who do not report using Floor Coverings International’s current standard software, or use it inconsistently, and thus for whom Floor Coverings International does not have complete sales data, and (c) that do not operate the franchise as a full time venture.

Over 2 Years in Operation

• Number of Franchises:  138
• Average Job Size:  $7,744
• Success Rate:  40%
• Slippage Rate:  55%
• Gross Margin %:  45%

Less Than 2 Years, But More Than 1 Year in Operation

• Number of Franchises:  88
• Average Job Size:  $6,155
• Success Rate:  33%
• Slippage Rate:  66%
• Gross Margin %:  44%

• This analysis does not contain information concerning operating costs or expenses.

• Some outlets have sold these amounts. Your individual results may differ. There is no assurance you’ll sell as much.

Section VI – Floor Coverings International Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️