How is the monthly gross revenue equivalent calculated for Canopy Lawn Care's minimum royalty?

According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the monthly gross revenue equivalent is calculated to provide franchisees with an understanding of the revenue needed to meet the minimum royalty obligations. The monthly gross revenue equivalent is determined by dividing the minimum royalty by 8%. This calculation shows the amount of gross revenue a franchisee must generate for 8% of that revenue to equal the minimum royalty fee.

For example, during months 7-12 after opening, the minimum royalty is $500. The corresponding monthly gross revenue equivalent is $6,250. This means a Canopy Lawn Care franchisee would need to generate $6,250 in gross revenue during those months for 8% of their gross revenue to equal the $500 minimum royalty. Similarly, in months 61 and beyond, the minimum royalty increases to $3,375, and the monthly gross revenue equivalent rises to $42,188.

It's important to note that these gross revenue equivalent figures are for illustrative purposes and are not minimum sales requirements. The actual royalty fee is the greater of 8% of gross revenue or the stated minimum royalty for that period. The annual gross revenue equivalent is calculated by multiplying the monthly gross revenue equivalent by 12, providing an annualized view of the revenue needed to meet minimum royalty obligations.