How is the Annual Gross Revenue Equivalent calculated for a Canopy Lawn Care franchise?

According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the Annual Gross Revenue Equivalent is calculated by first determining the Monthly Gross Revenue Equivalent. The Monthly Gross Revenue Equivalent is calculated by dividing the Minimum Royalty by 8%. This represents the amount a franchisee would need to generate in order for 8% of Gross Revenue to equal the Minimum Royalty. The Annual Gross Revenue Equivalent is then calculated by multiplying the Monthly Gross Revenue Equivalent by 12.

For example, during months 7-12 after opening, the Minimum Royalty is $500. Dividing this by 8% results in a Monthly Gross Revenue Equivalent of $6,250. Multiplying this by 12 gives an Annual Gross Revenue Equivalent of $75,000. During months 61+, the Minimum Royalty is $3,375. Dividing this by 8% results in a Monthly Gross Revenue Equivalent of $42,188. Multiplying this by 12 gives an Annual Gross Revenue Equivalent of $506,250.

It is important to note that these Gross Revenue Equivalent figures are provided for convenience only and are not minimum sales requirements for a Canopy Lawn Care franchise. The table in Item 6 of the FDD shows how the Minimum Royalty and Gross Revenue Equivalents increase over time, providing a benchmark for potential revenue growth. A prospective franchisee can use these figures to estimate potential revenue and royalty obligations over the first several years of operation.