Is a release required from the current franchisee as a condition for Canopy Lawn Care's approval of a transfer?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
al Disclosures. The following statements are added to Item 17:
Any general release the franchisee is required to assent to as a condition of renewal is not intended to nor shall it act as a release, estoppel or waiver of any liability franchisor may have incurred under the North Dakota Franchise Investment Law.
The Franchise Disclosure Document and Franchise Agreement may require franchisees to consent to termination or liquidated damages. This requirement may not be enforceable under North Dakota law.
Covenants not to compete during the term of and upon termination or expiration of the franchise agreement are enforceable only under certain conditions according to North Dakota law.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 45–47)
What This Means (2025 FDD)
According to the 2025 FDD, the requirement for a franchisee to sign a general release as a condition of sale or transfer with Canopy Lawn Care is subject to certain state laws. Specifically, addenda for Maryland, North Dakota, and Minnesota clarify the enforceability and scope of such releases.
In Maryland, the general release required as a condition of sale or transfer will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. Similarly, in North Dakota, any general release required as a condition of renewal will not act as a release, estoppel, or waiver of any liability Canopy Lawn Care may have incurred under the North Dakota Franchise Investment Law. Minnesota law prohibits Canopy Lawn Care from requiring a franchisee to agree to a general release that would relieve any person from liability imposed by Minnesota Statute §§80C.01 – 80C.22.
These state-specific addenda indicate that while Canopy Lawn Care's standard franchise agreement may include a general release requirement, its enforceability is limited by state franchise laws designed to protect franchisees. Prospective franchisees should carefully review the addendum specific to their state and consult with legal counsel to understand the implications of any release requirements in their franchise agreement.