Who is responsible for broker fees if a Canopy Lawn Care franchisee sells their franchise?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Transfer Fee. If you sell or otherwise transfer your franchise and engage with a broker or franchise sales organization, or if you request that we assist with the sale or transfer of your franchise and we engage a broker or franchise sales organization, you will be responsible for any commission or fees that the broker or franchise sales organization charges in connection with locating a buyer for your franchise before we will grant an approval of the transfer.
Source: Item 6 — OTHER FEES (FDD pages 19–24)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, a franchisee is responsible for broker fees if they sell or transfer their franchise and engage a broker or franchise sales organization. This also applies if the franchisee requests Canopy Lawn Care's assistance in the sale or transfer, and Canopy Lawn Care subsequently engages a broker or franchise sales organization. In either scenario, the franchisee must cover any commissions or fees charged by the broker or franchise sales organization related to finding a buyer. This payment is required before Canopy Lawn Care will approve the transfer.
This means that if a Canopy Lawn Care franchisee decides to sell their business and uses a broker to find a buyer, the franchisee, not Canopy Lawn Care, is responsible for paying the broker's fees. This is a standard practice in franchising, as the franchisee is the one benefiting directly from the broker's services in facilitating the sale. The franchisor's approval of the transfer is contingent upon these fees being settled.
Prospective Canopy Lawn Care franchisees should consider this potential cost when evaluating the financial implications of selling their franchise in the future. It's important to factor in potential broker fees when determining the profitability of a sale. Franchisees should also clarify with Canopy Lawn Care whether they have any preferred brokers or guidelines for broker selection to ensure a smooth transfer process.