How to Finance a Five Star Flooring Franchise: No-Showroom Model
By Chris Cornella
A Five Star Flooring franchise loan looks different from the financing behind a typical flooring store. There is no retail showroom to build and no warehouse full of inventory. Instead, the owner sells flooring projects in the customer’s home, buys material after a job is signed and schedules independent installers to do the work.
That model changes what a lender is actually financing. Below we cover how the concept works, which costs to confirm in the disclosure document, which loan programs fit a sales-and-logistics flooring business and what the brand’s SBA Franchise Directory listing means.
US Professional Funding is not affiliated with, sponsored by or endorsed by Five Star Flooring; the name is used only to describe the business. Figures in the franchisor’s disclosure document can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current disclosure document and franchise agreement with a qualified franchise attorney and accountant.
Five Star Flooring Franchise Loan at a Glance
- Concept: a home service flooring brand that sells interior and exterior flooring through an in-home consultation rather than a retail store.
- Operating model: material is purchased from local suppliers after a contract is signed, and installation is performed by independent subcontractors.
- Owner role: managing sales, scheduling, suppliers and installers rather than installing floors.
- Brand stage: a young franchise system recently launched by a franchisor that operates several home service brands.
- Fees and investment: confirm the franchise fee, royalty, marketing fees and Item 7 investment range in the current disclosure document; we could not verify them from the franchisor’s own materials.
- SBA Franchise Directory: listed under code S8935, with a note about lien position on collateral.
What Is Five Star Flooring?
Five Star Flooring describes a concierge-style flooring service. A consultant meets the homeowner, presents samples in the home, quotes one room or the whole house and coordinates every step, from moving furniture and removing old flooring to subfloor preparation and installation. Products include interior flooring such as luxury vinyl plank and hardwood, along with exterior and decking work. The brand emphasizes upfront pricing, quotes customers can use to phase a project over time and a labor guarantee.
Why the model matters to lenders. A traditional flooring retailer carries inventory, a storefront lease and a warehouse. This model is built to avoid all three. That lowers the hard-asset portion of the investment but leaves little collateral, so lender comfort rests on the owner’s sales ability, cash reserves and the franchisor’s lead generation and support systems.
A new system. With limited operating history across franchised territories, expect more questions from lenders. Our article on financing an emerging franchise brand explains what typically changes in underwriting.
Five Star Flooring Franchise Costs
We could not verify current fee or investment figures from the franchisor’s own materials or a current disclosure document, so request the latest Franchise Disclosure Document and read Items 5, 6 and 7 before you apply for financing.
Initial franchise fee. Item 5 states the fee, whether it varies by territory and whether any discounts apply. It is usually paid at signing, well before revenue begins.
Vehicle, office and equipment. Expect modest line items for a consultation vehicle, sample kits, measuring tools, a laptop or tablet, software and a home or small office. Confirm any vehicle, signage or wrap requirements.
Marketing and lead generation. In a sales-driven home service business, opening marketing and early lead generation can be among the largest cash outlays.
Training, licensing and insurance. Budget for training travel, any local contractor licensing, liability insurance and bonding your state requires.
Additional funds. Item 7 ends with additional funds for an initial period. This working capital covers the gap between buying material and paying installers and collecting the final payment.
Once you have the table, list each Item 7 line item with its range and confirm the categories add up to the stated total. Lenders compare your sources and uses of funds against it.
Ongoing Fees and How They Affect Your Loan
Royalty. Item 6 sets the royalty, typically a percentage of gross revenue. Check whether the rate changes as revenue grows and whether a minimum applies.
Marketing and technology fees. Look for brand fund contributions, local advertising requirements, lead generation or appointment booking charges and software fees. In a model that depends on booked appointments, these are core costs.
How lenders factor these costs in. Lenders start with revenue, subtract material and installer costs, then franchise fees, payroll and overhead to see what remains for loan payments. Because installation is subcontracted, gross margin per job is the number lenders study most closely, so build projections job by job.
Franchisor Requirements for New Owners
We could not verify published net worth or liquid capital minimums for Five Star Flooring, so ask the franchisor for its current qualifications. The brand describes owners as managers of revenue and operations, so sales, project management or small business leadership experience fits the profile, along with the ability to recruit and manage reliable installers.
Expect an inquiry, introductory calls, review of the disclosure document, a validation stage with existing owners and final approval before signing. Start the financing conversation early so a lender can review your plan in parallel.
Ways to Own a Five Star Flooring
A new territory. Most buyers in a young system open a new territory. Financing covers the fee, vehicle and equipment, opening marketing and working capital. See our page on franchise business start-up financing.
An existing territory. As the system grows, resales may become available, letting a buyer point to real job history and installer relationships. Our article on buying a franchise resale covers transfer approval and timing.
Multiple territories. Each added territory raises fees and marketing needs, so financing usually follows a staged plan.
Financing Options for a Five Star Flooring Franchise
SBA 7(a) loans. Because the brand is on the SBA Franchise Directory, the SBA 7(a) loan program can finance the franchise fee, equipment, a vehicle, opening marketing and working capital in one package. It is often the most practical route for a start-up territory with limited collateral.
SBA 504 loans. The SBA 504 program is built for owner-occupied real estate and long-lived fixed assets. A business run without a showroom or warehouse rarely has those, so 504 usually matters only if an owner later buys an office or storage building.
Conventional term loans. A conventional business loan can work for buyers with strong liquidity, outside collateral or an existing business, though conventional lenders often want more collateral on start-ups.
Equipment and vehicle financing. A consultation vehicle, sample displays and technology can be financed separately to preserve cash. Learn more about franchise equipment financing and leasing.
Working capital and lines of credit. Material is ordered and installers are scheduled before the final payment arrives, and whole-home projects stretch that gap. A line of credit can bridge it and smooth seasonal peaks in outdoor and decking work. See our franchise working capital options.
Seller financing on resales. A seller may carry part of the price on an existing territory. Any seller note must be acceptable to the senior lender, is typically subordinate to it and may be limited by SBA program rules.
SBA Loans for Five Star Flooring Franchisees
SBA lenders use the SBA Franchise Directory to confirm that a brand’s franchise agreement has been reviewed for eligibility. A listing does not approve any borrower; it clears the franchise relationship so the lender can focus on the borrower and the plan. The SBA 7(a) program maximum is currently $5 million, though program rules can change.
The directory listing. Five Star Flooring appears under code S8935, with this note: the lender or CDC must ensure they obtain the correct lien position on all collateral as required by the SBA’s lending rules.
What that note means in plain English. If the franchisor, a vehicle or equipment seller or another creditor could hold a security interest in business assets, the SBA lender must make sure its own lien has the priority the program requires. Expect a lien search before closing and, where needed, subordination agreements or payoffs. The note does not block SBA financing; it adds a closing step.
SBA application tips. Prepare a personal financial statement and tax returns, and build projections showing monthly consultations, signed jobs and installs. Our SBA loan calculator can estimate payments for planning only; it is not an offer or approval.
How Lenders Evaluate a Five Star Flooring Deal
Personal credit and financial history. For any Five Star Flooring franchise loan, lenders review credit, tax returns and a personal financial statement, and typically require a personal guarantee.
Net worth and liquidity. With few hard assets, cash left after closing matters. Reserves show you can keep marketing and paying installers while the pipeline builds.
Industry and management experience. Sales leadership, remodeling project management and subcontractor management all help. Explain how you will recruit, vet and schedule installers.
Business plan and projections. Base projections on appointments, close rate, average job size, material and installer cost per job and the time between deposit and final payment, with a realistic ramp.
The FDD and franchise agreement. Lenders review term, renewal, transfer, territory and any franchisor financing in Item 10, and whether Item 19 includes financial performance representations. See how lenders read a Franchise Disclosure Document.
Historical financials for resales. Buyers of an existing territory should expect to provide several years of profit and loss statements, job records and tax returns.
Suppliers, Installers and Job Cash Flow
Each project moves from measurement and quote to a signed contract and deposit, a material order, an installer schedule and final payment, and every step affects cash. Ask local suppliers about account terms, because paying at pickup strains working capital more than paying after installation. Plan to pay installers before you collect the final balance, understand when funds arrive from any homeowner financing program and budget for warranty callbacks tied to the labor guarantee.
Multi-Unit Growth and Development Agreements
Without a storefront, adding a territory is mostly a matter of marketing, sales staff and installer capacity. Ask the franchisor about development schedules, additional territory fees and how territories are defined. Once the first territory has a track record, lenders can underwrite its cash flow alongside the new one. Our article on multi-unit franchise financing explains how lenders view expansion.
Real-World Scenarios
A sales manager starting a first territory. An SBA 7(a) loan covers the fee, a vehicle, sample kits, opening marketing and working capital, and the lender focuses on reserves and the sales plan.
A remodeling contractor joining the brand. An owner of an independent remodeling company adds a recognized flooring name. The lender reviews the existing company’s financials and finances the fee and marketing with a conventional term loan.
A buyer purchasing an existing territory. The loan is based on the territory’s job history and tax returns, and a seller note covers a small part of the price, subordinate to the senior loan.
Common Mistakes to Avoid
- Assuming a low hard-asset investment means low cash needs
- Underestimating first-year marketing and lead generation costs
- Ignoring the gap between paying installers and collecting final payment
- Overlooking lien searches tied to the SBA directory note
- Signing before a lender has reviewed the disclosure document
For more pitfalls common to trade and home service businesses, read the service contractor loan mistakes that cost owners the most.
Next Steps to Finance Your Five Star Flooring Franchise
Step 1: Request the current disclosure document. Review it with a franchise attorney and accountant.
Step 2: Confirm the financial qualifications. Compare the franchisor’s requirements with your personal financial statement.
Step 3: Build a job-level projection. Model appointments, close rates, job sizes, costs, fees and collection timing.
Step 4: Talk with a financing specialist. Compare SBA 7(a) and conventional options and size your working capital.
Step 5: Apply and coordinate approvals. Submit your documents and align closing with the franchisor’s signing schedule.
Step 6: Close and launch. Complete lien searches, fund working capital, finish training and start marketing.
Five Star Flooring Franchise Loan FAQs
How much does it cost to open a Five Star Flooring franchise?
The total investment appears in Item 7 of the current disclosure document. We could not verify the current range, so use the latest document to build your budget.
What are the franchise fee and royalty?
The fee appears in Item 5 and the royalty and other recurring fees in Item 6. Check for separate marketing or technology fees.
Can I get an SBA loan for Five Star Flooring?
Yes, the brand is listed on the SBA Franchise Directory under code S8935. Its note means the lender must secure the correct lien position on collateral.
Do I need flooring experience?
The brand positions owners as managers of sales and operations, but lenders still like to see sales or business leadership experience.
What will a lender use as collateral?
Mostly vehicles, equipment and business assets. SBA lenders may also consider personal assets depending on loan size and program rules.
Can working capital be included in the loan?
Yes, either within an SBA 7(a) loan or as a separate line of credit.
Can a first-time business owner get a Five Star Flooring franchise loan?
Yes, with franchisor approval and solid credit, reserves and a documented sales plan.
Does Five Star Flooring offer financing?
Item 10 of the disclosure document states whether the franchisor offers any direct or indirect financing.
How long is the franchise term?
Item 17 covers the term, renewal and transfer. Lenders generally want the loan to fit within the remaining term.
What documents do I need to apply?
A personal financial statement, tax returns, a resume, a business plan with projections, the franchise documents and proof of your equity injection.
Final Thoughts
This brand trades a showroom and inventory for a sales-driven, logistics-heavy model, so a Five Star Flooring franchise loan centers on working capital, marketing and the owner’s ability to keep jobs moving. Buyers who verify the disclosure document figures, plan for installer payment timing and prepare for the SBA lien requirement put themselves in a strong position.
US Professional Funding helps franchise owners and buyers finance start-ups, acquisitions, equipment, working capital and refinancing. Learn more about our franchise financing programs and service contractor financing solutions.
