Am I required to cooperate with Clear Pest Pros during an inspection of my business?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
You promise to cooperate fully with us in any inspection of your Clear Pest Pros Business, and we promise to use our best efforts to not interfere with the operation of your Clear Pest Pros Business.
B. OUR RIGHT TO AUDIT.
We have the right at any time during business hours, and without prior notice to you, to inspect and audit, or cause to be inspected and audited, any and all financial statements, reports, income tax records, sales tax records, payroll records, software databases, and other records. You promise to cooperate fully with our representatives and independent accountants we hire to conduct any inspection or audit.
If any inspection or audit discloses an understatement of Gross Sales, we can debit your account, as provided in Sections 2.C and 2.H of this Agreement, for the Royalty and Brand Marketing Fund Fees which are due on the amount of the understatement, plus interest, at the rate of 18% per annum or the maximum rate permitted by applicable law, whichever is lesser, and all late fees, from the date originally due until the date of payment.
Furthermore, if we conduct an inspection or audit due to your failure to (a) furnish reports, supporting records, or other information as required, (b) furnish these items on a timely basis, (c) to record all Customer payments in the Clear Pest Pros Software within 48 hours of their receipt, or (d) use the Clear Pest Pros /Required Software for scheduling or invoicing, or we discover that an understatement of Royalty is greater than 3% for any period reviewed, you promise to reimburse us for the cost of the inspection and/or audit, including without limitation, the charges of attorneys and independent accountants, the travel, room and board expenses, and compensation of our employees. Further, if an understatement of the Royalty is greater than 3%, you also promise to pay us an additional penalty fee equal to 10% of the total amount of the understated Gross Sales.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, franchisees are required to cooperate fully with Clear Pest Pros during inspections and audits. Clear Pest Pros has the right to perform on-site inspections of the franchisee's business during business hours to ensure compliance with the franchise agreement and system standards. These inspections may include quality checks of home field services, employee interviews, and reviews of various business records and materials.
Specifically, Clear Pest Pros can inspect and audit financial statements, reports, income tax records, sales tax records, payroll records, software databases, and other records, without prior notice. Franchisees must cooperate fully with Clear Pest Pros's representatives and independent accountants during these audits.
If an inspection or audit reveals an understatement of gross sales, Clear Pest Pros can debit the franchisee's account for the owed royalty and brand marketing fund fees, along with interest at a rate of 18% per annum (or the maximum rate permitted by law) and any late fees. Furthermore, if the understatement of royalty exceeds 3% for any reviewed period, the franchisee must reimburse Clear Pest Pros for the cost of the inspection or audit, including attorney and accountant charges, travel expenses, and employee compensation. An additional penalty fee equal to 10% of the understated gross sales will also be assessed. These measures highlight the importance of accurate record-keeping and compliance with Clear Pest Pros's standards to avoid potential financial penalties and maintain a positive relationship with the franchisor.