Can Canopy Lawn Care require franchisees to enter into license agreements directly with suppliers?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
We may develop proprietary or non-proprietary hardware and/or software ("Proprietary System"). Accordingly, we may require that you enter into a license agreement with us or our affiliate, which may require you to pay us commercially reasonable fees and/or enter into license agreements directly with suppliers. Additionally, if we enter into a license agreement with a supplier and sublicense the Proprietary System to you, we may charge you for all amounts we pay to the supplier based on your use, plus a reasonable amount to compensate us for the service that we or our affiliate provide.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 32–38)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, Canopy Lawn Care may require franchisees to enter into license agreements directly with suppliers. Specifically, this condition applies if Canopy Lawn Care develops a proprietary system.
The FDD states that Canopy Lawn Care may develop proprietary or non-proprietary hardware and/or software, which they term the "Proprietary System." If Canopy Lawn Care implements such a system, they may require franchisees to enter into license agreements with Canopy Lawn Care or its affiliates. These agreements could involve paying commercially reasonable fees.
Furthermore, Canopy Lawn Care could require franchisees to enter into license agreements directly with suppliers for the Proprietary System. If Canopy Lawn Care enters into a license agreement with a supplier and then sublicenses the Proprietary System to the franchisee, Canopy Lawn Care may charge the franchisee for all amounts they pay to the supplier based on the franchisee's usage, along with an additional reasonable amount to compensate Canopy Lawn Care for their service.