What constitutes a material breach of the Canopy Lawn Care franchise agreement?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Each failure to pay Royalty Fees, Brand Fund Contribution, and other amounts payable to Franchisor when due shall constitute a material breach of this Agreement.
Franchisee acknowledges that this Section 6.7 shall not constitute Franchisor's agreement to accept such payments after same are due or a commitment by Franchisor to extend credit to, or otherwise finance Franchisee's operation of the Lawn Care Business.
Further, Franchisee acknowledges that failure to pay all such amounts when due shall, notwithstanding the provisions of this Section 6.7, constitute grounds for termination of this Agreement, as provided in this Agreement.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 Canopy Lawn Care Franchise Disclosure Document, a material breach of the franchise agreement occurs if a franchisee fails to pay Royalty Fees, Brand Fund Contributions, or any other amounts payable to Canopy Lawn Care when they are due. This is a significant point for prospective franchisees, as consistent and timely payments are critical to maintaining a good standing with the franchisor and avoiding potential termination of the franchise agreement.
Canopy Lawn Care emphasizes the importance of prompt payments by including a late interest charge. This charge is the lesser of 18% per month or the highest legal rate permitted by applicable law on all overdue payments. While the franchisor may accept late payments with interest, this does not waive their right to terminate the agreement due to the initial payment default.
This clause underscores the financial responsibilities of a Canopy Lawn Care franchisee. Failing to meet these obligations can have serious repercussions, including the potential loss of the franchise. Prospective franchisees should carefully consider their financial capabilities and ensure they can consistently meet all payment deadlines to avoid breaching the franchise agreement.