What is the condition for Canopy Lawn Care to increase the Brand Fund Contribution?
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 company reserves the right to increase the Brand Fund Contribution with at least 30 days' notice to the franchisee. Currently, franchisees must contribute 1% of their Gross Revenues to the Brand Fund, payable at the same time as the royalty fee. However, Canopy Lawn Care stipulates that the Brand Fund Contribution will not exceed 2% of Gross Revenues.
This means that Canopy Lawn Care franchisees could see their marketing contribution double over the term of the agreement. While 30 days' notice is required, this may not provide franchisees with much leverage to negotiate or adjust their business plans accordingly. Franchisees should factor in the potential for this increase when projecting their expenses and profit margins.
It is important to note that Canopy Lawn Care is not legally obligated to deposit the Brand Fund Contribution into a separate bank account. The funds may be placed in the company's general accounts or separate accounts, at their discretion. Canopy Lawn Care also administers the Brand Fund and may use a professional advertising agency or media buyer to assist them. While Canopy Lawn Care will provide an annual accounting of the Brand Fund upon request, the fund is not audited, so audited financial statements are not available.