Is the Canopy Lawn Care franchisor liable for the franchisee's obligations to pay their employees?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
THIS ASSIGNMENT is entered into this day of 20, in accordance with the terms of the Canopy® Franchise Agreement ("Franchise Agreement") between ("Franchisee") and CANOPY FRANCHISE CORPORATION, ("Franchisor"), executed concurrently with this Assignment, under which Franchisor granted Franchisee the right to own and operate a Lawn Care Business located at FOR VALUE RECEIVED, Franchisee hereby assigns to Franchisor (1) those certain telephone numbers and regular, classified or other telephone directory listings (collectively, the "Telephone Numbers and Listings") and (2) those certain Internet website addresses ("URLs") associated with Franchisor's trade and service marks and used from time to time in connection with the operation of the Lawn Care Business, as defined in the Franchise Agreement, at the address provided above. This Assignment is for collateral purposes only and, except as specified herein, Franchisor shall have no liability or obligation of any kind whatsoever arising from or in connection with this Assignment, unless Franchisor shall notify the telephone company and/or the listing agencies with which Franchisee has placed telephone directory listings (all such entities are collectively referred to herein as "Telephone Company") and/or Franchisee's internet service provider ("ISP") to effectuate the assignment pursuant to the terms hereof.
Upon termination or expiration of the Franchise Agreement (without the extension of Franchisee's rights to operate the Lawn Care Business), Franchisor shall have the right and is hereby empowered to effectuate the assignment of the Telephone Numbers and Listings and the URLs, and, in such event, Franchisee shall have no further right, title or interest in the Telephone Numbers and Listings and URLs, and shall remain liable to the Telephone Company and the ISP for all past due fees owing to the Telephone Company and the ISP on or before the effective date of the assignment hereunder.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Canopy Lawn Care franchise agreement includes a Collateral Assignment of Telephone Numbers and Telephone Listings and Internet Addresses. This assignment clarifies the relationship between the franchisee and franchisor regarding specific assets like telephone numbers and internet addresses.
According to the agreement, Canopy Lawn Care, as the franchisor, generally has no liability or obligation arising from this assignment unless they actively notify the telephone company or internet service provider to effectuate the assignment. This means that the franchisee is primarily responsible for all obligations related to these services, including any past due fees.
Upon termination or expiration of the franchise agreement, Canopy Lawn Care has the right to take over the Telephone Numbers and Listings and the URLs. However, even after this transfer, the franchisee remains liable for any outstanding fees owed to the Telephone Company and the ISP that accrued on or before the effective date of the assignment. This arrangement protects Canopy Lawn Care from being responsible for the franchisee's debts and ensures that the franchisee fulfills their financial obligations.