For Clear Pest Pros, are commissions paid to lead sources subject to the Royalty fee?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
You must report your Gross Sales each month. "Gross Sales," as used in this Agreement, means the total dollar amount of all sales generated through Clear Pest Pros Business for a given period, including, but not limited to, payment for any services or products sold by Franchisee,
whether for cash or credit, in services in kind, from barter and/or exchange, payment for any services or products sold by you, or otherwise, less any sales tax or bona fide refunds to customers for non-salvageable items. Gross Sales does not include (i) bona fide refunds to customers, (ii) sales tax collected by Franchisee, (iii) sales of used equipment not in the ordinary course of business, or (iv) sales of prepaid cards or similar products (but the redemption of any such card or product will be included in Gross Sales). Commissions paid to lead sources are subject to the Royalty.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, commissions paid to lead sources are subject to the Royalty fee. The Royalty is a percentage of Gross Sales, which is defined as the total dollar amount of all sales generated through the Clear Pest Pros Business.
This means that a Clear Pest Pros franchisee must include any commissions paid to lead sources when calculating their Gross Sales for the purpose of determining the Royalty fee owed to the franchisor. For example, if a franchisee pays a lead source $1,000 in commissions, that $1,000 would be included in the Gross Sales figure on which the Royalty is based.
This policy increases the cost of using lead sources for franchisees, as they not only have to pay the commission but also pay a percentage of that commission to Clear Pest Pros as part of their Royalty fee. Franchisees should consider this additional cost when evaluating the profitability of using lead sources to generate business.