For a Canopy Lawn Care franchise, what restrictions do those signing the Guaranty and Assumption of Franchisee's Obligations agree to comply with?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Each individual who owns, directly or indirectly, a 5% or greater interest in you (and, if you sign the Franchise Agreement as an individual, your immediate family defined as your spouse and domestic partner) must sign the Guaranty and Assumption of Franchisee's Obligations assuming and agreeing to discharge all of your obligations and comply with all restrictions under the Franchise Agreement (See Attachment B to the Franchise Agreement).
14.2 Restrictive Covenants. Franchisee covenants and agrees that:
- (a) During the Initial Term of this Agreement and any Interim Period thereof, Franchisee, its owners, guarantors and Designated Business Managers shall not, without the prior written consent of Franchisor, either individually or in a partnership, corporation, limited liability company, joint venture or other business entity or jointly or in conjunction with any person, firm, association, syndicate or corporation, as principal, agent, shareholder, member, partner, employee or in any manner whatsoever, carry on or be engaged in or be concerned with or interested in or advise, lend money to, guarantee the debts or obligations of or permit its name or any part thereof to be used or employed in any business operating in competition with a lawn care business or any Business as carried on during the Initial Term of this Agreement, including any Interim Period thereof.
- (b) Upon termination or expiration of the Initial Term or any Interim Period, regardless of the cause, or the transfer, sale or assignment of this Agreement by Franchisee, neither Franchisee, any guarantors, the Designated Business Manager nor Franchisee's owners will have any direct or indirect interest (i.e., through a relative) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, representative or agent, for two (2) years; in any Business: (1) in the Territory or any other franchisee's territory; (2) within 10 miles of the Territory or any other franchisee's territory; or (3) within 10 miles of any Franchisor or Affiliate owned Lawn Care Business.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 43–44)
What This Means (2025 FDD)
According to the 2025 Canopy Lawn Care Franchise Disclosure Document, individuals owning 5% or greater interest in the franchise, along with the franchisee's immediate family (spouse and domestic partner if the franchisee is an individual), must sign a Guaranty and Assumption of Franchisee's Obligations. By signing this, they agree to assume and discharge all of the franchisee's obligations and comply with all restrictions outlined in the Franchise Agreement.
These obligations and restrictions primarily relate to restrictive covenants, particularly concerning competition with Canopy Lawn Care. During the initial term of the agreement, those signing the Guaranty cannot, without prior written consent from Canopy Lawn Care, engage in any business that competes with the lawn care business. This restriction applies to various roles, including owner, partner, employee, or advisor, and covers any involvement with competing entities.
Upon termination or expiration of the franchise agreement, the restrictions extend for two years. During this period, those who signed the Guaranty cannot have a direct or indirect interest in any competing business within the territory, within 10 miles of the territory, or within 10 miles of any Canopy Lawn Care or affiliate-owned lawn care business. This includes acting as an owner, investor, partner, director, officer, employee, consultant, representative, or agent. These measures are in place to protect Canopy Lawn Care from unfair competition and to safeguard the value of its system and goodwill.