What is the procedure for Canopy Lawn Care to notify a franchisee of overdue fees?
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 the 2025 FDD, Canopy Lawn Care franchisees are subject to a late interest charge for overdue payments. Specifically, if a franchisee fails to make payments when due, they must pay a late interest charge upon demand. This charge is calculated as the lesser of (i) 18% per month or (ii) the highest legal rate permitted by applicable law. This late fee is intended to cover the costs and expenses Canopy Lawn Care incurs in handling and processing late payments.
It's important to note that this late payment provision does not obligate Canopy Lawn Care to accept late payments or extend credit to the franchisee. Furthermore, the FDD states that failure to pay amounts when due constitutes grounds for termination of the Franchise Agreement, regardless of the late payment charge. This underscores the importance of franchisees meeting their financial obligations to Canopy Lawn Care on time.
Prospective Canopy Lawn Care franchisees should be aware of these financial obligations and the potential consequences of late payments. Understanding the terms for late fees and the potential for termination due to non-payment is crucial for managing their franchise effectively and maintaining a good relationship with Canopy Lawn Care.