If a Canopy Lawn Care franchisee is convicted of a felony, is that considered a non-curable default?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
With respect to franchises governed by Minnesota Franchise Law, franchisor shall comply with Minn. Stat. Sec. 80C.14, subd. 3 which requires that except for certain specified cases, a franchisee be given 90 days' notice of termination (with 60 days to cure). Termination of the franchise by the franchisor shall be effective immediately upon receipt by franchisee of the notice of termination where its grounds for termination or cancellation are: (1) voluntary abandonment of the franchise relationship by the franchisee; (2) the conviction of the franchisee of an offense directly related to the business conducted according to the Franchise Agreement; or (3) failure of the franchisee to cure a default under the Franchise Agreement which materially impairs the goodwill associated with the franchisor's trade name, trademark, service mark, logo type or other commercial symbol after the franchisee has received written notice to cure of at least twenty-four (24) hours in advance thereof.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–47)
What This Means (2025 FDD)
According to the 2025 Franchise Disclosure Document, whether a felony conviction constitutes a non-curable default for a Canopy Lawn Care franchisee depends on the specific circumstances and the laws of the state governing the franchise agreement. In Minnesota, for example, the franchisor can terminate the franchise immediately if the franchisee is convicted of an offense directly related to the business.
However, the FDD also includes addenda for several states that modify the standard franchise agreement. These addenda often address termination clauses and may provide additional franchisee protections. For instance, some states require that termination be for "reasonable cause," which may be defined by state law. This means that even if the franchise agreement lists a felony conviction as grounds for termination, a court might not uphold that termination if it doesn't meet the state's definition of reasonable cause.
Prospective Canopy Lawn Care franchisees should carefully review the franchise agreement and any state-specific addenda to understand the conditions under which the franchise can be terminated. It's also important to consult with a franchise attorney to understand how local laws might affect the enforceability of the termination clauses. This due diligence can help a franchisee understand their rights and obligations and avoid potential disputes with Canopy Lawn Care.