What are the conditions that a Canopy Lawn Care franchisee must meet to be eligible for a successor term?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.1 This Agreement and the License granted shall continue for a period of ten years ("Initial Term"). This Initial Term shall begin on the date this Agreement is executed by Franchisor, subject, however, to termination in accordance with the provisions of this Agreement. When the Initial Term expires Franchisee shall have the option to extend its rights to operate the Lawn Care Business for two additional terms for a period of five years each ("Successor Term"), provided Franchisor determines in its sole and absolute discretion that Franchisee has met all of the following requirements:
- (a) Franchisee has not failed to remedy any breach of this Agreement specified by Franchisor in a written notice to Franchisee as per Sections 17.1 or 17.2;
- (b) Franchisee has not committed and received notice of three or more breaches of this Agreement in the 12 months prior to the end of the current Initial Term, even if such breaches were timely remedied;
(c) Franchisee has given Franchisor a written notice of intent to extend its rights to operate the Lawn Care Business no less than two months or more than six months prior to expiration of the Initial Term;
(d) Franchisee is current in its payment obligations to Franchisor, Franchisor's Affiliates, and Franchisee's trade creditors;
(e) Franchisee has met Franchisor's then-current qualifications for new or renewing Canopy® franchisees;
(f) Franchisee executes a successor franchise agreement ("Successor Franchise Agreement") and all other agreements in the form then being used by Franchisor in granting new franchises, which may contain materially different terms and conditions than this Agreement, provided that Franchisee will pay Franchisor the Successor Franchise Fee (defined below) instead of the Initial Franchise Fee and the Successor Term will be no less than five years, as described above.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, a franchisee has the option to extend their rights to operate the Lawn Care Business for two additional terms of five years each, referred to as the Successor Term. However, this is contingent on Canopy Lawn Care determining, at its sole discretion, that the franchisee has met specific requirements.
These requirements include rectifying any breaches of the Franchise Agreement specified in written notices from Canopy Lawn Care, and not having more than two breaches of the Agreement in the 12 months before the end of the initial term, even if those breaches were remedied. The franchisee must also provide written notice of their intent to extend the agreement between two and six months before the initial term expires.
Furthermore, the franchisee must be current with all payment obligations to Canopy Lawn Care, its affiliates, and their trade creditors. They must also meet the then-current qualifications for new or renewing Canopy Lawn Care franchisees. Finally, the franchisee must execute a successor franchise agreement that may contain different terms and conditions than the original agreement and pay Canopy Lawn Care the Successor Franchise Fee instead of the Initial Franchise Fee.