What is the purpose of the late charge for the Canopy Lawn Care promissory note?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Any payment is late if not received by holder within 10 days after it is due. If a payment is late, holder may, in its sole discretion elect to;
- A. Declare the entire unpaid principal and interest balances immediately due and payable; or
- B. Accept the late payment along with a late charge in the amount of 10% of the amount of the late payment. The late charge will be for the purpose of compensating holder for additional expenses which it is recognized that holder will incur as a result of the late payment.
Source: Item 23 — RECEIPT (FDD pages 55–199)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the late charge associated with the promissory note is intended to compensate the noteholder for the additional expenses incurred as a result of a late payment. Specifically, if a payment is not received within 10 days after its due date, Canopy Lawn Care, at its discretion, may either declare the entire unpaid balance immediately due or accept the late payment along with a late charge.
The late charge is calculated as 10% of the amount of the late payment. This means that if a franchisee's payment is late, they will be required to pay the original amount due plus an additional 10% of that amount as a late fee. This fee is designed to cover any extra costs that Canopy Lawn Care might face because of the delayed payment.
It is important for prospective Canopy Lawn Care franchisees to understand these terms to avoid incurring late charges. Franchisees should ensure that payments are made on time to avoid the additional expense and potential acceleration of the entire loan balance. The FDD also specifies that payments received are first applied to any late charges due, then to outstanding interest, and finally to the principal balance, further emphasizing the importance of timely payments.