What specific items are included as Collateral in the Security Interest granted to Canopy Lawn Care?

According to Canopy Lawn Care's 2025 Franchise Disclosure Document, franchisees grant the franchisor a Security Interest in specific items related to the Lawn Care Business. This Security Interest serves as collateral to secure the franchisee's obligations to Canopy Lawn Care.

The collateral includes all Vehicles, accounts, credit card receivables, cash, equipment, and franchise rights of the Lawn Care Business. It also extends to all similar property now owned or hereafter acquired, additions, substitutions, replacements, proceeds, and products thereof, wherever located, used in connection with the Lawn Care Business. Additionally, Canopy Lawn Care requires a Collateral Assignment of Telephone Numbers and Telephone Listings and Internet Addresses.

This means that if a Canopy Lawn Care franchisee defaults on their obligations to the franchisor, Canopy Lawn Care has the right to seize and liquidate these assets to recover the outstanding debt. The Security Interest granted to Canopy Lawn Care may be subordinated to financing related to the franchisee's operation of the Lawn Care Business, including a real property mortgage and Vehicle leases. This indicates that other lenders may have priority over Canopy Lawn Care's security interest in certain assets.

Prospective franchisees should carefully consider the implications of granting a security interest in their business assets. It is advisable to seek legal counsel to fully understand the scope of the security interest and the potential consequences of default.