What assets of the Canopy Lawn Care franchisee are subject to the franchisor's option to purchase?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.2 Upon any event described in this Section 16.2, Franchisor shall have the option to purchase all of Franchisee's rights, title and interest in the Business, and all its improvements, furniture, fixtures, equipment and products, and all of Franchisee's accounts, contract rights, customer and vendor lists, work in progress and other business assets.
- 16.3 The purchase price for assets itemized in Section 16.2 will be, subject to Section 16.4: (i) the current fair market value if Section 16.1(a) is applicable; or (ii) the price specified in the Purchase Offer received by Franchisee if Section 16.1(b) is applicable. If Franchisee and Franchisor cannot agree on fair market value within a reasonable time, an independent appraiser will be designated by each of Franchisee and Franchisor and an average of the 2 appraised values will be binding. Appraised values will exclude any and all consideration for goodwill or going concern value created by the Marks and business system licensed to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, Canopy Lawn Care has the option to purchase a franchisee's business assets under certain conditions. Specifically, Canopy Lawn Care can exercise this option upon the expiration or termination of the franchise agreement, or if the franchisor receives a purchase offer for the franchise.
If Canopy Lawn Care exercises its option to purchase, it can acquire all of the franchisee's rights, title, and interest in the business. This includes all improvements, furniture, fixtures, equipment, and products associated with the business. Additionally, Canopy Lawn Care can purchase all of the franchisee’s accounts, contract rights, customer and vendor lists, work in progress, and other business assets.
The purchase price for these assets will be determined by their current fair market value if the option is exercised due to the expiration or termination of the franchise agreement. Alternatively, if the option is triggered by a purchase offer received by the franchisee, the purchase price will be the price specified in that offer. The FDD specifies that appraised values will exclude any consideration for goodwill or going concern value created by the Canopy Lawn Care's Marks and business system licensed to the franchisee.