For Canopy Lawn Care vehicle leases, what is the significance of the 'Term'?

According to Canopy Lawn Care's 2025 Franchise Disclosure Document, the 'Term' in the vehicle lease agreement defines the duration of the lease for each vehicle. The term begins on the date the vehicle is delivered to the franchisee, referred to as the "Delivery Date," and continues for the "Lease Term" specified in the applicable Schedule, unless the agreement is terminated earlier.

The Lease Term is important because it dictates the period during which the franchisee has the right to use the vehicle and is obligated to make monthly rental payments. These payments are detailed in the Schedules and Open-End (Equity) Lease Rate Quotes. The franchisee is also responsible for a "Service Charge Due at Lease Termination" at the end of the Term, whether it ends due to expiration or early termination.

If the Term ends before its scheduled date due to franchisee default, a casualty, or any other reason, Canopy Lawn Care will recalculate the rentals and management fees using the rule of 78's, and the franchisee must pay the adjusted amount on the termination date. Furthermore, at the end of the Term, the franchisee may owe additional rent if the Book Value of the vehicle exceeds the greater of its wholesale value or 20% of its Delivered Price. Conversely, Canopy Lawn Care may owe the franchisee a terminal rental adjustment if the Book Value is less than these values. However, these calculations may be altered if the Term exceeds 48 months, the mileage exceeds 15,000 miles per year on average, or the vehicle has been subject to damage or excessive wear and tear.