Five Star Flooring franchise unit economics
Five Star Flooring franchisees run flooring businesses that quote, sell and install flooring jobs across a household-based territory.
Five Star Flooring franchise at a glance
Five Star Flooring’s Item 19 covers one company-controlled location in Macomb, Michigan, for the twelve months from September 1, 2024 to August 31, 2025. That location reported adjusted revenue of $2,895,922 and adjusted net profit of $345,892, or 11.94% of revenue.
Five Star Flooring’s one company-controlled location reported adjusted revenue of $2,895,922 from 1 September 2024 to 31 August 2025, according to Item 19 of Five Star Flooring’s 2026 FDD, issued 8 April 2026. Fees paid to Five Star Flooring come to about 8.4%* of sales. A Five Star Flooring franchise costs $157,000 to $264,500 to open.
- Five Star Flooring states the location’s revenue for the period was $2,758,021 before an adjustment for a price increase of $0.50 a square foot.
- A Five Star Flooring franchise costs $157,000 to $264,500 to open for one location, including a $59,500 initial franchise fee.
- A Five Star Flooring franchise pays a royalty of 6% of Gross Revenue, payable when a job is booked, with a monthly minimum from the 7th month of operation.
- A Five Star Flooring franchisee must spend at least 10% of annual Gross Revenue on territory advertising, which includes a National Marketing Fee of up to 2.5%.
- Five Star Flooring had no franchised locations at the end of 2023, 2024 or 2025, and projects 11 franchised openings in 2026.
These figures come from Five Star Flooring's 2026 Franchise Disclosure Document, as the brand reported them, and were read by Averan Advisors.
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Talk to Averan → Averan Five Star Flooring Conversion Package →- Item 19 reports one location, and it is company-controlled. The Macomb, Michigan location traded as In and Out Floors, owned and managed by Dean Hartley, the brand president, before the franchisor acquired it in 2025. The figures cover the twelve months before the acquisition.
- Two adjustments in the statement add $258,936* to profit. Revenue is raised $137,901* from the $2,758,021 recorded, and sales labor is halved from $242,070 to $121,035 on the assumption that the owner handles half of all selling. Without those two, adjusted net profit of $345,892 would be $86,956*.
- Cost of goods, installation and material, is 56.28%* of adjusted revenue. $1,629,764 of $2,895,922. Gross profit is $1,266,158, or 43.72%. Installation labor is inside that line and is not shown separately.
- Advertising is the largest expense line after cost of goods, at 12.50% of adjusted revenue. $362,129. Item 6 requires territory advertising of at least 10% of annual Gross Revenue, which at the adjusted revenue is $289,592*.
- The royalty is charged when a job is booked. Item 6 makes the royalty payable on booking the job, not on completion, and collects it weekly, currently on Wednesdays. The National Marketing Fee is payable at the same time.
Adjusted profit and loss
How much does a Five Star Flooring franchise make?
| Line | Amount | Share of revenue |
|---|---|---|
| Adjusted revenue | $2,895,922 | 100% |
| Cost of goods (installation and material) | $1,629,764 | 56.28%* |
| Gross profit | $1,266,158 | 43.72% |
| Advertising | $362,129 | 12.50% |
| Royalty | $144,796 | 5.00% |
| Overhead | $124,387 | 4.30% |
| Sales labor | $121,035 | 4.18% |
| Admin labor | $110,000 | 3.80% |
| Ad fund | $57,918 | 2.00% |
| Total expenses | $920,266 | 31.78%* |
| Adjusted net profit | $345,892 | 11.94% |
Amounts and percentages as printed, except the cost of goods and total expenses shares, which are Averan calculations. The six expense lines add to $920,265* against the printed $920,266. Overhead covers utilities, telephone, office supplies, software, card processing fees and insurance.
The one company-controlled Five Star Flooring location reported adjusted revenue of $2,895,922 and adjusted net profit of $345,892, 11.94% of revenue, for the twelve months to August 31, 2025. No franchised location was open, so Item 19 contains no franchisee figures.
The location traded as In and Out Floors before the franchisor acquired it in 2025. It was owned and managed by Dean Hartley, who is the brand president and a full-time employee of the parent company. Item 19 says the figures cover all company-controlled locations.
The franchisor adjusted the statement to remove owner-level expenses and to reflect costs it expects independent owners to carry. Item 19 lists the adjustments in four notes under the table. The next section sets out what each one changes.
Item 19 shows the royalty at 5.00% and the ad fund at 2.00% of adjusted revenue. Item 6 prints a royalty of 6.0% of Gross Revenue up to $1,000,000 in a calendar year and 5.0% above that, and a National Marketing Fee of up to 2.5%.
The adjustments
Adjustments in the Item 19 statement
| Line | In the statement | As recorded | Effect on profit * |
|---|---|---|---|
| Revenue (Note 1) | $2,895,922 | $2,758,021 | +$137,901 |
| Sales labor (Note 4) | $121,035 | $242,070 | +$121,035 |
| Admin labor (Note 3) | $110,000 | $90,294 telephone answering | −$19,706 |
| Royalty and ad fund at 7% (5% and 2%) | $202,714 | $193,061 at recorded revenue | −$9,653 |
Statement and recorded amounts as printed in the Item 19 notes. The royalty and ad fund figure at recorded revenue, and the last column, are Averan calculations. A positive effect means the adjustment raises adjusted net profit.
Note 1 raises revenue from the $2,758,021 recorded to $2,895,922, a 5.0%* increase. The note says this reflects a price increase of $0.50 a square foot that had not applied during the period, and that it would not alter expenses.
Note 4 halves sales labor from the $242,070 incurred to $121,035. It assumes the owner handles half of all sales responsibilities. The single-location Item 7 estimate also assumes the owner is the salesperson.
Note 3 sets admin labor at $110,000, above the $90,294 the location paid for telephone answering. It allows $40,000 for the designated answering vendor and imputes a $70,000 salary for an administrative team member.
With revenue and sales labor at the recorded amounts and every other line as printed, adjusted net profit would be $86,956*, or 3.15%* of recorded revenue. Adding back the admin labor difference and the lower royalty and ad fund on recorded revenue gives $116,315*, or 4.22%*. These are Averan calculations from the printed notes, not figures in the FDD.
What Item 19 covers
What Item 19 shows about results across locations
Item 19 does not show how results spread across locations, because it reports one location. There are no averages, medians, quartiles or ranges.
The reporting period is September 1, 2024 to August 31, 2025. It is the twelve full months before the franchisor acquired the business, not a calendar year.
Item 19 says the location is not operated differently from a franchise business except for pilot programs and the adjustments. It does not describe the pilot programs or say how many households the location serves.
Item 20 records 6 company-owned outlets opened in Michigan in 2025. The franchisee list in Item 20 states that the only outlet was company-owned. The FDD does not explain the difference; the 6 may be territories served by the one business.
Brand charges
Brand charges
| Charge | As printed | A year at $2,895,922 * |
|---|---|---|
| Royalty | 6% of Gross Revenue up to $1,000,000 a calendar year, 5.0% above; monthly minimum $1,000 (months 7–12), $1,500 (year 2), $2,000 (year 3), $2,500 (from year 4) | $173,755 at 6% |
| Territory advertising | At least 10% of annual Gross Revenue, including the National Marketing Fee; any shortfall is paid as National Marketing Fees | $289,592 |
| National Marketing Fee (inside the 10%) | Up to 2.5% of monthly Gross Revenue; monthly minimum $350 rising to $1,200 from year 4 | Up to $72,398 |
| Operations software | $1,100 to $2,500 a month | $13,200 to $30,000 |
| Call center | $250 a month plus $1.50 a minute; paid by the marketing fund for the first three months | $3,000 plus minutes |
| Accounting software and bookkeeping | $0 to $250 and $0 to $300 a month, paid to vendors | $0 to $6,600 |
| Paid to the brand: royalty, National Marketing Fee, lowest software and call center base | $243,394 (8.40%) |
Rates as printed in Item 6 (pages 15 to 25). Dollar amounts are Averan calculations at the location’s adjusted revenue. The total applies the 6% royalty rate to the first $1,000,000 and 5.0% above it, $154,796; Item 6 does not say whether the 5.0% rate above $1,000,000 applies to the whole year or only to revenue above $1,000,000. Territory advertising beyond the National Marketing Fee is spent by the franchisee, not paid to the franchisor, and is not in the total.
The royalty is 6% of Gross Revenue, payable when a job is booked and collected weekly. The franchise agreement makes it due on the earliest of signing a service agreement, the customer accepting the proposal or receiving any payment from the customer.
The monthly royalty minimum starts in the 7th month of operation at $1,000 and reaches $2,500 from the 37th month. At 6%, $2,500 a month equals the royalty on $500,000* of annual Gross Revenue. A franchisee that does not report sales through the proprietary software pays a minimum of the greater of $3,000 a month or 6% of its 12-month average.
Territory advertising must be at least 10% of annual Gross Revenue. The amount includes the National Marketing Fee and online lead generation from the designated vendor. Item 7 Note 13 adds that franchisees must spend at least $20,000 a month on marketing by month three.
Item 12 sets minimum annual revenue targets to keep the territory protected. They are $1.50 per household in year 2, $2.00 in year 3 and $3.00 from year 4. For a 150,000-household territory that is $225,000, $300,000 and $450,000*. A franchisee below the target may pay the royalty difference to keep the territory.
The marketing fund received $0 of contributions in 2025. A regional marketing fund is currently 0% and can be set at up to 2% of Gross Revenue by a 65% vote of franchisees in a region; it counts toward the 10% territory advertising.
Cost to open
Cost to open
| Item | Low | High |
|---|---|---|
| Initial franchise fee | $59,500 | $59,500 |
| Quick Start Package | $19,000 | $19,000 |
| Optional Quick Start Package trailer add-on | $0 | $40,000 |
| Annual conference registration deposit | $1,000 | $1,000 |
| Marketing | $35,000 | $65,000 |
| Warehouse, premises and show displays | $3,000 | $4,000 |
| Supplies, inventory and equipment | $7,500 | $25,000 |
| Computer equipment and software | $1,000 | $2,000 |
| Travel and living for training | $2,500 | $4,000 |
| Vehicle or trailer, with wrap | $500 | $32,500 |
| Professional services (licensing, insurance, legal) | $7,500 | $13,500 |
| Recruiting and personnel | $2,000 | $5,000 |
| Working capital, 3 months | $20,000 | $50,000 |
| Total as printed | $157,000 | $264,500 |
Lines and totals as printed. The lines add to $158,500 and $320,500*, not the printed totals. The cover page states $157,500 to $264,500 for one location.
Item 7 estimates $157,000 to $264,500 to open one Five Star Flooring location. The estimate assumes the owner is the salesperson. The lines as printed add to $158,500 to $320,500*; the FDD does not explain the difference.
The initial franchise fee is $59,500 for a territory of up to about 150,000 households. Extra households cost $0.40 each. Territories bought together cost $59,500 for one, $99,500 for two, $134,500 for three, $164,500 for four, $194,500 for five and $224,500 for six.
An existing similar business that merges into the franchise gets a discount on the initial fee. It is 25% at $200,000 of annual gross sales, 50% at $300,000, 75% at $400,000 and 100% at $500,000 and above. A veteran discount of 10% is also offered.
A two-territory executive model with a hired salesperson is estimated at $197,500 to $457,000. It carries the $99,500 fee for two territories and up to $120,000 of working capital.
Item 11 puts the typical time from signing to opening at about 90 days. The franchise must open within 120 days of signing the agreement. Item 7 recommends at least 1,000 square feet of warehouse space; a storefront is not required.
Locations
Locations, 2023 to 2025
| Year | Franchised at start | Franchised opened | Franchised at end | Company-owned at start | Company-owned opened | Company-owned at end |
|---|---|---|---|---|---|---|
| 2023 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2024 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2025 | 0 | 0 | 0 | 0 | 6 | 6 |
As printed in Item 20 Tables 1, 3 and 4. There were no terminations, non-renewals, reacquisitions, closures or transfers in any year.
Five Star Flooring had no franchised locations at the end of 2023, 2024 or 2025. Item 1 says the franchisor began offering franchises in December 2025.
Item 20 shows 6 company-owned outlets opened in Michigan in 2025. The franchisee list states that the only outlet was company-owned and not franchised.
No franchise agreements were signed but not opened at the end of 2025. The franchisor projects 11 franchised openings in 2026: 3 in Texas and 1 each in Arizona, California, Massachusetts, North Carolina, Nevada, Ohio, Oregon and Pennsylvania.
Item 21 attaches the audited financial statements of the parent, Five Star Franchising, L.L.C., with its guarantee of the franchisor’s obligations. The parent is owned by FS PEP Holdco, LLC, an affiliate of Princeton Equity Group.
Questions we get asked
Questions owners ask
How much does it cost to open a Five Star Flooring franchise?
The 2026 FDD estimates $157,000 to $264,500 for one location with the owner as salesperson, including the $59,500 initial franchise fee and a $19,000 Quick Start Package. A two-territory executive model with a hired salesperson is estimated at $197,500 to $457,000.
What fees does Five Star Flooring charge?
A royalty of 6% of Gross Revenue up to $1,000,000 a calendar year and 5.0% above, payable when a job is booked, with a monthly minimum from the 7th month. Franchisees must spend at least 10% of annual Gross Revenue on territory advertising, which includes a National Marketing Fee of up to 2.5%. Operations software is $1,100 to $2,500 a month.
How much revenue does a Five Star Flooring location make?
Item 19 reports one company-controlled location in Michigan. It had adjusted revenue of $2,895,922 for the twelve months to August 31, 2025, and recorded revenue of $2,758,021 before an adjustment for a later price increase. There are no franchisee figures.
How much profit does the Five Star Flooring location make?
Item 19 shows adjusted net profit of $345,892, or 11.94% of adjusted revenue. The statement halves sales labor and raises revenue for a price increase. With those two lines at the recorded amounts, Averan calculates $86,956*.
How many Five Star Flooring locations are there?
At the end of 2025 there were no franchised locations and 6 company-owned outlets in Michigan, according to Item 20. The franchisor projects 11 franchised openings in 2026.
How large is a Five Star Flooring territory?
A territory is up to about 150,000 households, and additional households cost $0.40 each. The territory is exclusive while the franchisee meets minimum revenue targets of $1.50 per household in year 2, $2.00 in year 3 and $3.00 from year 4.
Questions worth putting to Five Star Flooring
These are questions the filing leaves open. An owner or a buyer can put them to the franchisor directly.
- Is the revenue in Item 19 gross sales or collected revenue, and how many locations sit below the average?
- Which factors does Five Star Flooring see in its highest-selling locations, such as territory, years open and staffing?
- How long does a new location take to reach the average you publish, and what does the build-up look like month by month?
- At what level of sales do the minimum charges stop applying and the percentage take over?
- How many Five Star Flooring locations closed, were sold, or changed hands last year, and why?
Run your own numbers.
The Franchise Numbers Check runs the same checks on your own numbers. It scores where you stand and compares you with Item 19 of your brand’s FDD. It works out what one location earns and spends, and builds a 13-week cash forecast. It also checks whether you are ready to open another one. It is free and it runs in your browser.
Launch the diagnostic →Reporting for a Five Star Flooring owner
We review your unit economics and cash forecast and build your monthly reporting around the figures on this page.
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Questions owners ask next
The figures above raise these, and each one is answered on its own page.
- At what level of sales does a minimum fee stop costing me more than the percentage?It works out the sales level where a minimum fee stops applying.
- How much cash do I fund before a new location covers its own costs?It builds a 13-week forecast for the months before break-even.
- What does this location earn on the money I put into it?It works out the payback period and cash-on-cash return for one unit.
- How much of Item 19 can I rely on?It explains what an Item 19 financial performance representation tells you and what it leaves out.
Where these figures come from
Every figure here comes from Five Star Flooring Franchise, LLC’s 2026 FDD and is unaudited by us. We are unaffiliated with the brand. Calculations of our own are labeled where they appear. The figures describe past performance at other businesses and are not a projection of yours. This page is an educational summary. It is not an offer to sell a franchise, and it is not financial, legal or tax advice. Five Star Flooring is a trademark of its owner. How Averan reads a Franchise Disclosure Document.
These figures come from the brand's disclosure. They are not a forecast, an offer to sell a franchise or advice. Source: Five Star Flooring Franchise, LLC, 2026 Franchise Disclosure Document, issued 8 April 2026.