Does the Clear Pest Pros Franchise Agreement address the restrictive covenants contained in the agreement?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
which consent must not be unreasonably withheld, and without first paying or causing to be paid to Franchisor the Transfer Fee provided for in said Franchise Agreement, if applicable, and without otherwise complying with the transfer provisions of the foregoing Franchise Agreement. You further agree to be bound by the in-term and post-term covenants against competition of the aforesaid Franchise Agreement.
ARTICLE II CONFIDENTIALITY
During the term of this Agreement, you will receive information which Franchisor considers a trade secret and confidential information ("Confidential Information"). You will not, during the term of this Agreement or thereafter, communicate, divulge, or use for the benefit of any other person, partnership, association, corporation, or limited liability company any Confidential Information including, without limitation, operating procedures, customer lists, sources of supply, supplier contracts, advertising materials, copyrighted materials, equipment specifications, any information contained in the Operations Manual, trade secrets, copyrighted materials, and other methods, techniques and know-how concerning the operation of the Franchised Business which
may be communicated to you or of which you may be apprised by virtue of your relationship with Franchisee and role as a Guarantor of the Franchise Agreement.
ARTICLE III NON-COMPETITION
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- During the Term of the Franchise Agreement. During the term of this Franchise Agreement, you shall not:
- a. Engage as an owner, partner, shareholder, director, officer, employee, consultant, agent, or in any other capacity in any other business offering pest management for all manner of ants, spiders, roaches, stinging pests, flying pests and rodents on a recurring and/or one time basis, and other related services that are the same as or similar to the services sold by the Clear Pest Pros Business (except for other franchises or authorizations we enter into with you;
- b. Use our Confidential Information, System, Clear Pest Pros owners' intranet website, Operations Manual, Marks, Customer lists, Customer Information, trade secrets, trade dress, proprietary knowledge, or know-how, or any colorable imitations, in the design, development, or operation of any business other than the Clear Pest Pros Business franchised hereunder, unless specifically authorized by us; or
- c. Divert or attempt to divert any business or customer of the Clear Pest Pros Business to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks or the System.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, the Franchise Agreement includes restrictive covenants addressing confidentiality and non-competition, both during the term of the agreement and after its termination. These covenants aim to protect Clear Pest Pros' confidential information, customer relationships, and market position.
During the term of the Franchise Agreement, franchisees are prohibited from engaging in any business that offers similar pest management services, using Clear Pest Pros' confidential information or system for other businesses, or diverting customers to competitors. These restrictions apply to the franchisee, their Managing Owner, and Designated General Manager. Additionally, Clear Pest Pros requires franchisees to have their Managing Owners, Designated General Managers, and certain employees sign non-disclosure and confidentiality agreements to further protect trade secrets and customer information.
Post-termination, the agreement also restricts franchisees from competing with Clear Pest Pros. If a franchisee sells their Clear Pest Pros business, they must agree not to compete for 24 months within a 50-mile radius of the sold territory. The owners who have executed the Franchise Agreement must control 67% of the franchisee entity. The remaining Owners must sign a personal guaranty, written agreement to maintain confidentiality of the trade secrets and their agreement to abide by the covenant not to compete, as described in Sections 6 and 13 of this Agreement.
These restrictive covenants are typical in franchise agreements to safeguard the franchisor's brand, system, and customer base. Prospective Clear Pest Pros franchisees should carefully review these provisions to understand the limitations on their business activities during and after the franchise term. They should also consider the implications for their employees and any potential sale of the franchise.