What is the late interest charge that Canopy Lawn Care franchisees must pay on overdue payments?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.7 To encourage prompt payment and to cover the costs and expenses involved in handling and processing late payments Franchisee shall also pay, upon demand, a late interest charge equal to the lesser of (i) 18% per month; or (ii) the highest legal rate permitted by applicable law, whichever is lower, on all payments due to Franchisor during the period of time said payments are due and unpaid.
Each failure to pay Royalty Fees, Brand Fund Contribution, and other amounts payable to Franchisor when due shall constitute a material breach of this Agreement.
Franchisee acknowledges that this Section 6.7 shall not constitute Franchisor's agreement to accept such payments after same are due or a commitment by Franchisor to extend credit to, or otherwise finance Franchisee's operation of the Lawn Care Business.
Further, Franchisee acknowledges that failure to pay all such amounts when due shall, notwithstanding the provisions of this Section 6.7, constitute grounds for termination of this Agreement, as provided in this Agreement.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, franchisees are required to pay a late interest charge on overdue payments. This charge is intended to encourage prompt payment and cover the costs associated with handling late payments.
The specific late interest charge is the lesser of two options: 18% per month or the highest legal rate permitted by applicable law. This means that Canopy Lawn Care will assess whichever rate is lower, ensuring compliance with local regulations while also providing an incentive for timely payments.
The FDD emphasizes that failure to pay Royalty Fees, Brand Fund Contributions, and other amounts when due constitutes a material breach of the Franchise Agreement. However, the document also clarifies that the late interest charge does not obligate Canopy Lawn Care to accept late payments or extend credit to franchisees. Furthermore, Canopy Lawn Care retains the right to terminate the Franchise Agreement for failure to pay amounts when due, regardless of the late interest charge provision.