Is the franchise fee paid by the Franchisee to Canopy Lawn Care recurring or non-recurring?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
will not have any right to negotiate any contract or provide services to the National Account without Franchisor's express written consent.
5. FEES
- 5.1 Franchisee shall pay the sum described on Attachment A plus, if due and payable, all applicable federal, state or municipal taxes, as a non-recurring initial franchise fee ("Initial Franchise Fee") to Franchisor upon the execution of this Agreement. The Initial Franchise Fee shall be paid by means of cashier's check, money order or wire transfer. The Initial Franchise Fee shall be deemed to have been fully earned by Franchisor when paid. The Initial Franchise Fee is non-refundable once paid except as provided for in Section 5.2**.**
- 5.2 The Initial Franchise Fee will be non-refundable unless Franchisor terminates the Agreement because Franchisee failed, after diligent pursuit using all commercially reasonable efforts as determined in Franchisor's sole discretion, to obtain the applicable permits and licenses required by the state and local government applicable to its Territory within 6 months. Franchisor shall notify Franchisee in writing that it is exercising its right to terminate the Agreement pursuant to this Section 5.2, in which case 50% of the Initial Franchise Fee shall be refunded to Franchisee within 30 days of Franchisor's notice of termination to Franchisee.
- 5.3 Franchisee shall pay Franchisor continuing royalty fees ("Royalty Fees") at such time, for such periods, and in such manner as specified herein, or as otherwise specified in writing by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the initial franchise fee is a non-recurring fee. Upon signing the Franchise Agreement, the franchisee must pay Canopy Lawn Care the initial franchise fee outlined in Attachment A, along with any applicable federal, state, or municipal taxes. This fee must be paid via cashier's check, money order, or wire transfer.
The FDD specifies that Canopy Lawn Care considers the initial franchise fee fully earned upon payment. This fee is generally non-refundable. However, there is an exception: if the franchisee diligently pursues all necessary permits and licenses within 6 months but fails to obtain them, and Canopy Lawn Care then terminates the agreement, 50% of the initial franchise fee will be refunded to the franchisee within 30 days of the termination notice.
Furthermore, if a franchisee chooses to extend their franchise agreement for additional terms, they will need to execute a Successor Franchise Agreement and pay Canopy Lawn Care a Successor Franchise Fee. This Successor Franchise Fee is equal to the greater of $10,000 or 20% of the then-existing Initial Franchise Fee. This fee structure is fairly typical in franchising, where initial fees are one-time but renewal fees apply for extending the franchise term.