What is the currently offered APR for financing the Initial Franchise Fee with Clear Pest Pros?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
(statutory or otherwise) | |If you would like to finance a portion of the Initial Franchise Fee, and you meet our credit standards, you may do so through a promissory note (the "Note"), which is currently attached as Exhibit B. You must make a down payment of at least 50% of the Initial Franchise Fee. We are currently offering an APR of 10% but reserve the right to adjust the APR being offered up to 15%, based on your credit history. We will not adjust APR of the Note once your Franchise Agreement has been signed. A late fee of five percent (5%) or $50, per week, whichever sum is greater, will be collected if you fail to make timely payments or your payments are returned to us with non-sufficient funds. The only security we require is a personal guaranty of the Note by you and by all the owners, as well as all respective spouses, of the company. The personal guaranty will require the owners of the franchisee entity to personally guaranty and be personally bound by all of the obligations of the Note, including payment.
The term of the Note will be 12 months to 24 months, as agreed between you and us. You may prepay the Note without penalty at any time during its term. If you fail to make any payment, we can call the Note and demand immediate payment of the full outstanding balance. We can also terminate your Franchise Agreement if you fail to make payments as agreed; however, before your Franchise Agreement can be terminated, you will receive a notice of default and have a ten-day period to cure the default. The Note shall survive termination of the Franchise Agreement.
If you enter into the Note, you will agree to waive presentation for payment, demand, notice of non-payment, protest, and all other demands and notices required by law (statutory or otherwise). In the event that you should default under the Note, and legal proceedings are commenced to collect the indebtedness of the note, you agree to pay all costs and expenses, including reasonable attorney fees, incurred in the collection of the Note. A sample Note is attached to this Disc
Source: Item 10 — FINANCING (FDD pages 38–39)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, franchisees who meet the credit standards can finance a portion of the Initial Franchise Fee through a promissory note. Clear Pest Pros requires a down payment of at least 50% of the Initial Franchise Fee. The current annual percentage rate (APR) offered is 10%, but Clear Pest Pros reserves the right to adjust this rate up to 15% based on the franchisee's credit history. Once the Franchise Agreement is signed, the APR will not be adjusted.
Clear Pest Pros also stipulates that a late fee of 5% or $50 per week, whichever is greater, will be charged for late payments or payments returned due to non-sufficient funds. The financing is secured by a personal guaranty from the franchisee and all owners (including spouses) of the company. The term of the promissory note ranges from 12 to 24 months, as agreed upon by Clear Pest Pros and the franchisee, and the note can be prepaid without penalty.
If a franchisee fails to make payments, Clear Pest Pros can demand immediate payment of the full outstanding balance and may terminate the Franchise Agreement. However, the franchisee will receive a notice of default and a ten-day period to cure the default before termination. The promissory note obligations survive the termination of the Franchise Agreement.
Furthermore, the franchisee must waive certain legal rights, such as presentation for payment, demand, and notice of non-payment. In the event of default and subsequent legal proceedings, the franchisee is responsible for all costs and expenses, including reasonable attorney fees, incurred in the collection of the debt.