In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Canopy Lawn Care franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Canopy Lawn Care franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Canopy Lawn Care outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Canopy Lawn Care franchise opportunity

Section V – Presentation and analysis of Canopy Lawn Care’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, highest, and lowest revenue per customer account for all accounts, residential accounts, and commercial accounts for one affiliate-owned Canopy Lawn Care business that operated for at least 12 months and that operated for the full duration of the reporting period

• 2023 revenue, cost of materials, cost of labor, gross profit, disclosed expenses, and revenue less disclosed expenses for the one affiliate-owned Canopy Lawn Care business that operated for at least 12 months and that operated for the full duration of the 2023 calendar year

• 2022 and 2023 annual revenue comparison for the one affiliate-owned Canopy Lawn Care business that operated for at least 12 months and that operated for the full duration of the 2023 calendar year

• 2023 recurring revenue percent, sales conversion rate, and customer retention rate for the one affiliate-owned Canopy Lawn Care business that operated for at least 12 months and that operated for the full duration of the 2023 calendar year

• 2023 recurring revenue percent, sales conversion rate, and customer retention rate for the one affiliate-owned Canopy Lawn Care business that operated for at least 12 months and that operated for the full duration of the 2023 calendar year

• 2023 total customers serviced, total service visits completed, total square feet serviced, and total service vehicles in service for the one affiliate-owned Canopy Lawn Care business that operated for at least 12 months and that operated for the full duration of the 2023 calendar year

Section VI – Key ratios, comparables, computations, and analyses for the Canopy Lawn Care franchise opportunity (exclusive content for Platinum subscribers)

Section I – Canopy Lawn Care Franchise Costs

• Canopy Lawn Care franchise costs, based on Item 7 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500
• Grand Opening Marketing Spend:  $5,000 to $50,000
• Service Vehicle Down Payment and Lease Payments:  $8,000 to $90,000
• Aftermarket Vehicle Items:  $15,000 to $40,000
• Rent:  $900 to $1,200
• Construction, Leasehold Improvements, Furniture, and Fixtures:  $0
• Supplies, Uniforms, and Inventory:  $1,000 to $3,000
• Computer Systems:  $1,500 to $2,500
• Insurance Deposits and Premiums:  $900 to $1,800
• Travel and Living Expenses While Training:  $1,000 to $5,000
• Professional Fees and Business Licenses:  $500 to $1,200
• Office Equipment and Supplies:  $500 to $1,000
• Additional Funds – 3 Months:  $15,000 to $20,000
• Total Estimated Canopy Lawn Care Franchise Costs:  $98,800 to $265,200

Section II – Canopy Lawn Care’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Canopy Lawn Care’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2024 FDD:

• Initial Franchise Fee:  $49,500

• Royalty Fee:  the greater of 8% of Gross Revenue or the required Minimum Royalty (ranging from $500 per month per territory 7-12 months after opening to $3,375 per month per territory 61+ months after opening)

• Brand Fund Contribution:  currently 1% of Gross Revenues. Maximum of 2% of Gross Revenues.

• Individual Advertising Investment:  payable by EFT monthly on or before the fifth of each month. A minimum of $50,000 during the first 12 months of operations, plus an additional $25,000 for each additional contiguous Territory. After the first year of operations, you must spend the greater of $30,000 for the first Territory plus an additional $15,000 for each additional contiguous Territory, or 10% of the prior year’s Gross Revenues.

Section III – Number of Franchised and Company-Owned Canopy Lawn Care Outlets

Franchised

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2022

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2023

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Company-Owned

2021

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  4
• Net Change:  0

2022

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  4
• Net Change:  0

2023

• Outlets at the Start of the Year:  4
• Outlets at the End of the Year:  4
• Net Change:  0

Section IV – News Updates on the Canopy Lawn Care Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Canopy Lawn Care Franchise (Item 19, 2024 FDD)

• Unless otherwise explained below, these financial performance representations disclose historical information for the affiliate-owned Canopy outlets that have opened for at least 12 months and that operated for the full duration of the reporting period of January 1, 2023 to December 31, 2023 (“Reporting Period”).

• These financial performance representations are for the outlet owned and operated by Canopy Lawn Care’s affiliate in Raleigh, NC that also provides services in Charlotte, NC (“Reporting Unit”), which opened in 2016. Canopy Lawn Care did not have any franchisees as of September 30, 2023.

• The Reporting Unit included in this financial performance representation offers services that you will not be authorized to offer under the terms of your Franchise Agreement. However, the franchisor has excluded data from those other services from this financial performance representation. The data included below is only for the core service and enhancement services that you will also be authorized to offer.

• The turf care services offered by the Reporting Unit is substantially similar to the Canopy Franchised Businesses for which Canopy Lawn Care is offering franchises in the disclosure document. The Reporting Unit is not limited by territorial boundaries, and its core business is represented by customer activity concentrated within zip codes that, when aggregated, represent four territories.

Part 1 – Revenue per Account January 1, 2023 Through December 31, 2023

• The following table sets forth the average, median, high, and low account revenue for all accounts and for residential and commercial accounts serviced by the Reporting Unit during the Reporting Period.

All Accounts

• Total Number of Customer Accounts:  1,327
• Average Revenue per Customer Account:  $750.24
• Number of Customer Accounts Above Average:  279
• % of Projects Above Average:  21.0%
• Median Revenue per Customer Account:  $476.00
• Maximum Customer Account Revenue:  $19,580
• Minimum Customer Account Revenue:  $228.00

Residential Accounts

• Total Number of Customer Accounts:  1,257
• Average Revenue per Customer Account:  $612.53
• Number of Customer Accounts Above Average:  361
• % of Projects Above Average:  28.7%
• Median Revenue per Customer Account:  $476.00
• Maximum Customer Account Revenue:  $16,118.00
• Minimum Customer Account Revenue:  $228.00

Commercial Accounts

• Total Number of Customer Accounts:  70
• Average Revenue per Customer Account:  $3,582.24
• Number of Customer Accounts Above Average:  21
• % of Projects Above Average:  30.0%
• Median Revenue per Customer Account:  $3,145.00
• Maximum Customer Account Revenue:  $19,580.00
• Minimum Customer Account Revenue:  $250.00

Part 2 – Revenue Less Disclosed Costs for January 1, 2023 Through December 31, 2023

• The following table presents revenues and certain operating expense information for the Reporting Unit for the reporting period January 1, 2023 through December 31, 2023. The table presents the dollar amount for each category and the various categories as a percent of Revenues.

Revenue:  $965,281 (100.0%)

Cost of Goods Sold

• Cost of Materials:  $240,517 (24.9%)
• Cost of Labor:  $191,954 (19.9%)
• Total Cost of Goods Sold:  $432,471 (44.8%)

Gross Profit:  $532,810 (55.2%)

Disclosed Costs

• Advertising and Marketing:  $55,347 (5.7%)
• Vehicle Fuel and Tolls Expense:  $27,638 (2.9%)
• Vehicle Repairs and Maintenance Expense:  $6,364 (0.7%)
• Vehicle Lease Expenses:  $40,496 (4.2%)
• Equipment Expenses:  $6,504 (0.7%)
• Insurance:  $13,504 (1.4%)
• Mobile Phones and Internet:  $5,147 (0.5%)
• Merchant Services:  $24,132 (2.5%)
• Software Licenses:  $8,431 (0.9%)
• Professional Fees:  $5,395 (0.6%)
• Uniforms and Operating Supplies:  $5,212 (0.5%)

• Royalty:  $77,222 (8.0%)
• Technology Fee:  $19,306 (2.0%)
• Brand Fund Contribution:  $9,653 (1.0%)
• Total Disclosed Expenses:  $304,352 (31.5%)

Revenue Less Disclosed Expenses:  $228,459 (23.7%)

• Revenue includes all Gross Revenue net of refunds to customers.

• Cost of Materials includes lawn care products, such as fertilizer, herbicides, pesticides, grass seed, soil, etc.

• Cost of Labor includes wages and payroll taxes for lawn care technicians.

• The reporting units invested $51,792 in marketing and advertising services during the reporting period. Franchisees should expect to invest the greater of $30,000 or 9% of the prior year’s gross revenues for local marketing.

• Vehicle repairs and maintenance expenses include vehicle registration and repairs and maintenance expenses.

• Vehicle lease expenses include the cost of monthly vehicle lease payments.

• Equipment expenses include equipment rental, replacement, repairs, and maintenance.

• Insurance expenses include commercial policy, workers compensation, and auto policies.

• Mobile phones and internet expenses include cell phones and other mobile devices and internet services.

• Merchant Service costs for the Reporting Unit were $10,984 during the Reporting Period. Franchisees should expect merchant service costs of approximately 2.5% of gross revenue.

• Software licenses include telephony (voice-over-IP subscription), GPS vehicle tracking, accounting, payroll, human resources, and recruiting software services.

• Professional fees include bookkeeping, tax preparation, and recruiting services.

• Uniforms and operating supplies include technician uniforms and other miscellaneous operating expenses.

• Royalty includes a royalty fee equal to 8% of Gross Revenues that the Reporting Unit would have paid.

• Technology Fee covers the proprietary technology systems to efficiently gain customers and communicate with customers, deliver work, and receive payments. This system includes: website hosting and local presence optimization, automated lawn measurement using artificial intelligence, dynamic pricing table, automated quote generation and distribution to prospects, automated sales follow-ups to prospects, SMS messaging, online sales and payment collection, scheduling tool, automated invoicing and payment collection, telephony integration, lead tracking, marketing integrations, and email accounts.

• Brand fund contribution includes a charge of 1% of gross revenue for national brand marketing and advertising activities per the franchise agreement.

• Certain expenses have been excluded that a franchise operator may incur. Excluded expenses include facility rent and utilities, cost of a full-time manager, and employee benefits.

Part 3 – Annual Revenue Comparisons for Various Periods from January 1, 2023 Through December 31, 2023

• The chart below sets forth the Gross Revenues achieved by the Reporting Unit during the period of January 1, 2023 through December 31, 2023 compared to the Gross Revenues for comparable periods of time for the 2022 calendar year.

Annual Revenue Comparison

• 2022:  $650,567
• 2023:  $965,281

Part 4 – Recurring Revenue Percent, Sales Conversion Rate, and Customer Retention Rate for January, 1, 2023 through December 31, 2023

• Recurring Revenue Percent:  74.7%
• Sales Conversion Rate:  37.4%
• Customer Retention Rate:  80.6%

• Recurring Revenue is calculated by measuring the dollars of revenues earned from recurring revenue contracts (monthly or quarterly or annual renewal contracts) earned over the reporting period ($720,642) divided by the total net revenue earned over the reporting period ($965,281).

• Sales conversion rate is calculated by dividing the number of new customers signing a new service contract (377) divided by the total number of prospective customers that received a quote for services (1,008) during the reporting period. Canopy’s automated proposal system generates a proposal for all prospects who complete a webform on the company’s website. All website leads receive a proposal, as do all qualified leads via phone and email.

• The Customer retention rate is calculated by dividing the number of customers signing a renewal contract (257) during the reporting period (January 1, 2023 – December 31, 2023) that also had a contract during the twelve months preceding the reporting period (January 1, 2022 – December 31, 2022) by the total number of customers that had contracts in the twelve months preceding the reporting period (319).

Part 5 – Average Annual Revenue per Vehicle, Average Annual Accounts Served per Vehicle, Average Annual Service Visits per Vehicle and Average Annual Square Feet Serviced per Vehicle for January 1, 2023 to December 31, 2023

• The table below shows total Gross Revenue, total customers serviced, total service visits completed, and total square feet of turf serviced and the total number of service vehicles used during the Reporting Period.

• Based on the three service vehicles that operated full time throughout the reporting period and one vehicle that operated an estimated 50% of the time during the Reporting Period, Canopy Lawn Care calculated the average annual revenue per service vehicle, average annual customers per service vehicle, average annual service visits completed per service vehicle, and the average annual square feet serviced per service vehicle.

• The total annual square feet serviced is the sum of the square feet of all client properties as measured by the technicians and recorded in the CRM.

• Total Gross Revenue:  $965,281
• Total customers serviced:  1,327
• Total service visits completed:  8,190
• Total square feet serviced:  16,960,867
• Total service vehicles in service:  3.5
• Average annual revenue per service vehicle:  $275,795
• Average annual accounts per service vehicle:  379
• Average annual visits per service vehicle:  2,340
• Average annual square feet per service vehicle:  4,845,962

• The average annual revenue per service vehicle is calculated by dividing the total reported Gross Revenue divided by the total reported vehicles in service.

• The average annual accounts per service vehicle is calculated by dividing the total number of customers serviced divided by the total reported vehicles in service.

• The average annual visits per service vehicle is calculated by dividing the total number of service visits completed by the total reported vehicles in service.

• The average annual square feet per service vehicle is calculated by dividing the total square feet serviced divided by the total reported vehicles in service.

• Some outlets have earned this amount. Your individual results may differ. There is no assurance that you’ll earn as much.

Section VI – Canopy Lawn Care Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️