When are debts and taxes arising in connection with a Canopy Lawn Care business due?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.7 To encourage prompt payment and to cover the costs and expenses involved in handling and processing late payments Franchisee shall also pay, upon demand, a late interest charge equal to the lesser of (i) 18% per month; or (ii) the highest 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.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, franchisees are expected to make prompt payments. To encourage this, Canopy Lawn Care charges a late interest fee. This fee is the lesser of 18% per month or the highest legal rate permitted by applicable law. This interest is applied to all payments due to Canopy Lawn Care that remain unpaid.
Specifically, the Franchise Agreement states that failure to pay Royalty Fees, Brand Fund Contributions, and other amounts payable to the franchisor when due constitutes a material breach of the agreement. This underscores the importance of timely payments in maintaining a good standing with Canopy Lawn Care.
While the agreement outlines penalties for late payments, it also clarifies that Canopy Lawn Care is not obligated to accept late payments or extend credit to franchisees. This means franchisees must manage their finances responsibly to ensure all payments are made on time. Failure to do so can lead to termination of the Franchise Agreement, regardless of the late payment provisions.