Does a Canopy Lawn Care franchisee have a first claim on any Adjacent Territory?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
You may be granted, in our sole discretion, express permission to sell or service customers in an unsold territory adjacent to your Territory ("Adjacent Territory"). However, you must agree that when this Adjacent Territory is granted to another franchisee, you will, upon receipt of written notice from us, cease all sales and service efforts within the Adjacent Territory, and return to us, within 10 days of the notice, all customer and prospect information related to the Adjacent Territory assign to us or our designee all customer contracts in the Adjacent Territory; and pay to us any amounts (or a pro rata portion of any amounts) paid by customers within the Adjacent Territory for Services you have not yet performed. For example, if a customer pre-paid for a year of Services and you have performed only half of the contracted work, you must pay us 50% of the amount the customer paid you. You do not have any first claim on any Adjacent Territory. Territories are awarded on a first-come, first-served basis to qualified applicants that meet our requirements to operate a Lawn Care Business.
Source: Item 12 — TERRITORY (FDD pages 38–41)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, a franchisee does not have a first claim on any Adjacent Territory. Canopy Lawn Care may grant a franchisee permission to sell or service customers in an unsold territory adjacent to their own, referred to as an "Adjacent Territory," at their sole discretion. However, this permission is not a guarantee or right. Territories are awarded to qualified applicants on a first-come, first-served basis.
If Canopy Lawn Care grants the Adjacent Territory to another franchisee, the original franchisee must cease all sales and service efforts in that territory upon written notice. They must also return all customer and prospect information related to the Adjacent Territory within 10 days of the notice. Additionally, the original franchisee must assign all customer contracts in the Adjacent Territory to Canopy Lawn Care or its designee and pay Canopy Lawn Care any amounts (or a pro rata portion of any amounts) paid by customers within the Adjacent Territory for services not yet performed.
For example, if a customer pre-paid for a year of services and the franchisee has only performed half of the contracted work, the franchisee must pay Canopy Lawn Care 50% of the amount the customer paid. This arrangement carries a risk for the franchisee, as they could lose business and be required to remit funds for uncompleted services if Canopy Lawn Care decides to award the Adjacent Territory to someone else. This contrasts with some franchise systems where existing franchisees are given right of first refusal for nearby territories.