What constitutes a material breach of the Canopy Lawn Care Franchise Agreement regarding payments?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
hest legal rate permitted by applicable law, whichever is lower, on all payments due to Franchisor during the period of time said payments are due and unpaid. 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.
- 6.8 Any report of Franchisor's auditor rendered from time to time pursuant to this Section 6, shall be final and binding upon all of the parties hereto.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 Canopy Lawn Care Franchise Disclosure Document, failing to pay Royalty Fees, Brand Fund Contributions, and any other amounts owed to Canopy Lawn Care when they are due is considered a material breach of the Franchise Agreement.
To encourage timely payments, Canopy Lawn Care also charges a late interest fee. This fee is the lesser of 18% per month or the highest legal rate allowed by law. This interest is applied to all overdue payments from the date they were originally due until they are paid.
It is important to note that Canopy Lawn Care's acceptance of late payments or interest does not waive their right to address the initial payment default. Canopy Lawn Care retains the right to terminate the Franchise Agreement due to non-payment, as outlined in the agreement.