What is the minimum term length for a Successor Franchise Agreement with Canopy Lawn Care?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
proval of Franchisor, which approval may be granted or withheld in Franchisor's sole discretion.
3. TERM OF THE AGREEMENT AND LICENSE
- 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;
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the minimum term length for a Successor Franchise Agreement is five years. Specifically, the FDD states that when the initial ten-year term expires, a franchisee has the option to extend their rights to operate the Lawn Care Business for two additional terms, each lasting five years, provided certain conditions are met. One of these conditions is that the franchisee must execute a Successor Franchise Agreement.
This Successor Franchise Agreement will be in the form then being used by Canopy Lawn Care for new franchises, which may contain different terms and conditions than the original agreement. However, the franchisee will pay a Successor Franchise Fee instead of the Initial Franchise Fee, and the Successor Term will be no less than five years.
This information is important for prospective franchisees as it outlines the potential duration of their franchise agreement beyond the initial term and the conditions required to achieve this extension. It also highlights that the terms of the Successor Franchise Agreement may differ from the original agreement, which could impact the franchisee's obligations and rights.