What are the two options for calculating the Royalty Fee for a Canopy Lawn Care franchise?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
yalty per Territory per month:
| Months After | Minimum Royalty | Monthly | Annual |
|---|---|---|---|
| Opening | Per Territory | Gross Revenue Equivalent*(i) | Gross Revenue Equivalent*(ii) |
| 7-12 | $500 | $6,250 | $75,000 |
| 13-24 | $875 | $10,938 | $131,250 |
| 25-36 | $1,250 | $15,625 | $187,500 |
| 37-48 | $1,625 | $20,313 | $243,750 |
| 49-60 | $2,500 | $31,250 | $375,000 |
| 61+ | $3,375 | $42,188 | $506,250 |
*These Gross Revenue Equivalent figures are provided for convenience purposes only. They are not minimum sales requirements.
- (i) The Monthly Gross Revenue Equivalent was calculated by dividing the Minimum Royalty by 8%.
Source: Item 6 — OTHER FEES (FDD pages 19–24)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the royalty fee is calculated based on a minimum royalty per territory per month or a percentage of gross revenues. The specific calculation method is not detailed in the provided excerpts.
The excerpts do provide a table showing the minimum royalty fee per territory per month, which varies depending on how long the franchise has been open. For months 7-12, the minimum royalty is $500. This increases incrementally, reaching $3,375 for months 61 and beyond. The table also lists a "Gross Revenue Equivalent," which is the amount a franchisee would need to generate for 8% of gross revenue to equal the minimum royalty. For example, during months 7-12, a franchisee would need to generate $6,250 in gross revenue for 8% of that revenue to equal the $500 minimum royalty.
However, the exact percentage of gross revenues used to calculate the royalty fee is not specified in the provided excerpts. A prospective franchisee should ask Canopy Lawn Care for clarification on the specific percentage used to calculate the royalty fee based on gross revenues, and how the franchisor determines which calculation method (minimum royalty vs. percentage of gross revenues) is used in any given month.