Can Canopy Lawn Care require a franchisee to pay Royalty Fees more frequently than monthly?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.4 The Royalty Fees shall be payable to Franchisor on or before the 5th day of each month and shall be payable through the entire Initial Term of this Agreement and any Interim Period. If Franchisee signs a Successor Franchise Agreement, Franchisee will be required to pay the Royalty Fees set forth therein. Franchisor has the right to vary the Royalty Fees and how it is determined in any Successor Franchise Agreement Franchisee may sign. Franchisee shall pay the Royalty Fees monthly or in such other frequency as Franchisor may in its sole discretion require upon written notice to Franchisee by Franchisor. Franchisee shall not subordinate to any other obligation its obligation to pay the Royalty Fees or any other fee or charge hereunder. Each Royalty Fees payment will be accompanied by a report as set forth in Section 5.4(a).
Source: Item 22 — CONTRACTS (FDD page 55)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the company has the right to require franchisees to pay Royalty Fees more frequently than monthly. While the standard is that Royalty Fees are paid monthly, Canopy Lawn Care retains the discretion to change the payment frequency.
Specifically, Canopy Lawn Care can, with written notice to the franchisee, require Royalty Fees to be paid at a different frequency. This change is at Canopy Lawn Care's sole discretion, meaning they are not obligated to justify the change or negotiate it with the franchisee.
For a prospective Canopy Lawn Care franchisee, this means that while the initial agreement specifies monthly payments, the payment schedule could change. This could impact the franchisee's cash flow management and require adjustments to their financial planning. It is important for a potential franchisee to consider this possibility and inquire about the conditions under which Canopy Lawn Care might alter the payment frequency.