What is the procedure for Canopy Lawn Care to notify a franchisee of overdue fees that could lead to termination?
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)
Based on the 2025 Franchise Disclosure Document, Canopy Lawn Care franchisees must pay royalty fees, brand fund contributions, and other amounts when due. Failure to do so constitutes a material breach of the agreement. To encourage prompt payment, Canopy Lawn Care charges a late interest fee of the lesser of 18% per month or the highest legal rate permitted by applicable law on all overdue payments.
While the FDD states that failure to pay all amounts when due constitutes grounds for termination of the agreement, it does not explicitly detail the exact notification procedure Canopy Lawn Care follows before terminating the agreement for overdue fees.
A prospective Canopy Lawn Care franchisee should seek clarification from the franchisor regarding the specific steps and timeline involved in notifying a franchisee of overdue fees and the opportunity to remedy the situation before termination occurs. Understanding these procedures is crucial for maintaining a good relationship with the franchisor and avoiding potential termination.