What is the length of each Successor Term for a Canopy Lawn Care franchise?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
3.1 This Agreement and the License granted shall continue for a period of ten years ("Initial Term"). This Initial Term shall begin on the date this Agreement is executed by Franchisor, subject, however, to termination in accordance with the provisions of this Agreement. When the Initial Term expires Franchisee shall have the option to extend its rights to operate the Lawn Care Business for two additional terms for a period of five years each ("Successor Term"), provided Franchisor determines in its sole and absolute discretion that Franchisee has met all of the following requirements:
- (a) Franchisee has not failed to remedy any breach of this Agreement specified by Franchisor in a written notice to Franchisee as per Sections 17.1 or 17.2;
- (b) Franchisee has not committed and received notice of three or more breaches of this Agreement in the 12 months prior to the end of the current Initial Term, even if such breaches were timely remedied;
(c) Franchisee has given Franchisor a written notice of intent to extend its rights to operate the Lawn Care Business no less than two months or more than six months prior to expiration of the Initial Term;
(d) Franchisee is current in its payment obligations to Franchisor, Franchisor's Affiliates, and Franchisee's trade creditors;
(e) Franchisee has met Franchisor's then-current qualifications for new or renewing Canopy® franchisees;
(f) Franchisee executes a successor franchise agreement ("Successor Franchise Agreement") and all other agreements in the form then being used by Franchisor in granting new franchises, which may contain materially different terms and conditions than this Agreement, provided that Franchisee will pay Franchisor the Successor Franchise Fee (defined below) instead of the Initial Franchise Fee and the Successor Term will be no less than five years, as described above.
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to the 2025 Canopy Lawn Care FDD, the initial term for a franchise agreement is ten years. Upon completion of the initial term, a franchisee has the option to extend their rights to operate the lawn care business for two additional terms. Each successor term is five years, provided the franchisee meets specific requirements set by Canopy Lawn Care.
To qualify for a successor term, the franchisee must not have unresolved breaches of the agreement, must not have had three or more breaches in the 12 months before the initial term's end, and must provide written notice of their intent to extend the agreement within a specified timeframe. They must also be current on all payment obligations and meet Canopy Lawn Care's qualifications for new or renewing franchisees.
Furthermore, the franchisee must execute a successor franchise agreement that may contain different terms and conditions than the original agreement. While the successor agreement may differ, the successor term will be no less than five years. This ensures that franchisees who meet the criteria have the opportunity to continue operating their Canopy Lawn Care business for additional, defined periods.