When are Gross Revenues deemed received by a Canopy Lawn Care franchisee?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) The term "Gross Revenues" means amounts derived from all products or services sold from or through your Franchise (across all Territories), including any sale of products or services made for cash or credit, or partly for cash and partly for credit. "Gross Revenues" also includes the fair market value of any services or products received by you in barter or in exchange for services and products. Gross Revenues are deemed received by the franchisee at the time the services or products are delivered or at the time the sale takes place, whatever occurs first, regardless if final payment has actually been received by the franchisee. There is no rollover credit for weeks in which the royalty amount exceeds the minimum. Gross Revenues do not include:
- (i) the amount of any tax imposed by any federal, state, municipal or other governmental authority directly on sales and collected from customers, provided that the amount of any such tax is shown separately and in fact paid by you to the appropriate governmental authority; and
- (ii) all customer refunds, valid discounts and coupons, and credits made by the Fencing Business (exclusions will not include any reductions for credit card user fees, financing program fees, returned checks or reserves for bad credit or doubtful accounts).
Source: Item 6 — OTHER FEES (FDD pages 19–24)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, Gross Revenues are considered received by the franchisee either when the services or products are delivered or when the sale occurs, whichever happens first. This holds true regardless of whether the franchisee has actually received final payment.
This definition of when revenues are 'deemed received' is important because it directly impacts the calculation of royalty fees and other payments to Canopy Lawn Care. The franchisee is responsible for paying a percentage of Gross Revenues as a royalty fee, so the timing of when revenue is 'deemed received' affects when that royalty obligation arises.
For a prospective Canopy Lawn Care franchisee, this means that you will owe royalty fees on revenues from services provided or sales made, even if you haven't yet collected the cash from your customers. This is a fairly standard practice in franchising, but it's crucial to understand the implications for cash flow management. Franchisees need to ensure they have sufficient funds to cover royalty payments even if customer payments are delayed.