How does Canopy Lawn Care administer and maintain the Brand Fund?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
We have established a production and marketing fund (the "Brand Fund") to promote CANOPY® businesses in the System and conduct other promotional and marketing activities. We currently require that you contribute 1% of your Gross Revenues to the Brand Fund ("Brand Fund Contribution"). You must pay the Brand Fund Contribution at the same time that you pay your Royalty fee. We reserve the right to increase the Brand Fund Contribution upon at least 30 days' notice to you, provided that the Brand Fund Contribution will not exceed 2% of Gross Revenues.
Unless required by law, we will not be required to deposit the Brand Fund Contribution in a separate bank account, commercial account or savings account and we may place the Brand Fund Contribution in our general accounts or in separate accounts. The Brand Fund will be administered by us, in our discretion, and we may use a professional advertising agency or media buyer to assist us.
We may reimburse ourselves, our authorized representatives or our affiliates from the Brand Fund for administrative costs, independent audits, reasonable accounting, bookkeeping, reporting and legal expenses, taxes and all other reasonable direct or indirect expenses that may be incurred by us or our authorized representatives and associated with the programs funded by the Brand Fund. We assume no other direct or indirect liability or obligation to collect amounts due to the Brand Fund or to maintain, direct or administer the Brand Fund. Any unused funds in any calendar year will be applied to the following year's funds, and we reserve the right to contribute or loan additional funds to the Brand Fund on any terms we deem reasonable. Since we do not have this fund audited, audited financial statements are not available to Franchisees. We will provide to you, upon request, an annual accounting for the Brand Fund that shows how the Brand Fund proceeds have been spent for the previous year and plans to invest the Brand Fund for the current year.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 32–38)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the Brand Fund is administered by the company at its discretion and may utilize a professional advertising agency or media buyer for assistance. Canopy Lawn Care may reimburse itself, its representatives, or affiliates for various expenses related to the Brand Fund, including administrative costs, audits, accounting, bookkeeping, legal expenses, and taxes. The company does not assume liability for collecting amounts due to the Brand Fund or for its direct administration. Any unused funds at the end of the year will be carried over to the following year, and Canopy Lawn Care reserves the right to contribute or loan additional funds to the Brand Fund as needed.
Franchisees are required to contribute 1% of their gross revenues to the Brand Fund, payable at the same time as their royalty fee. Canopy Lawn Care retains the right to increase this contribution with 30 days' notice, up to a maximum of 2% of gross revenues. While the Brand Fund is not audited, Canopy Lawn Care will provide franchisees with an annual accounting of how the funds were spent in the previous year and the investment plans for the current year, upon request.
In practice, this means that Canopy Lawn Care has significant control over the Brand Fund and its usage. While franchisees contribute to the fund, they do not have direct input into its management or spending decisions. The lack of an independent audit may be a concern for some franchisees, but the franchisor does provide an annual accounting. The ability of Canopy Lawn Care to increase the contribution rate, although capped at 2%, is also a factor for prospective franchisees to consider when evaluating the financial implications of the franchise.