What is the alternative calculation for the Minimum Local Advertising Spend for a Canopy Lawn Care franchisee?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
of how the Grand Opening Advertising was spent. Franchisor reserves the right to, or designate others to, create the plan and direct the spending for Franchisee's marketing efforts. During the second full calendar year of operations and each subsequent calendar year thereafter, Franchisee is required to spend the greater of $30,000 for the first Territory plus an additional $10,000 for each additional contiguous Territory, or 10% of the prior calendar year's Gross Revenues on local advertising ("Minimum Local Advertising Spend").
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 Canopy Lawn Care FDD, after the initial startup period, franchisees must spend a minimum amount on local advertising. This minimum is calculated in two ways, and the franchisee is required to spend whichever amount is greater.
The first calculation is a fixed amount based on the number of territories the franchisee operates. For the first territory, the franchisee must spend $30,000, and an additional $10,000 for each additional contiguous territory. The alternative calculation is based on the franchisee's gross revenues from the prior calendar year. Specifically, the franchisee must spend 10% of the previous year's gross revenues on local advertising.
Franchisee's contributions to the Brand Fund count toward the required minimum local advertising spend. Canopy Lawn Care also has the right to collect the minimum advertising spend from the franchisee and administer the marketing and advertising investments on the franchisee's behalf.