Does the Clear Pest Pros franchise agreement require compliance with post-term non-competition covenants?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise agreement | Summary | |
|---|---|---|---|
| Software; (xxiii) you fail to comply with the anti-terrorism provision; (xxiv) you take for your own personal use any assets or property of Clear Pest Pros Business; or (xxv) if there are insufficient funds in your bank account to cover a check or EFT payment 3 or more times within any 12-month period or you fail to achieve minimum sales for 3 consecutive months. | |||
| i. | Franchisee's obligations on termination/non renewal | Section 13 | Upon termination or early expiration of the Franchise Agreement, your obligations include: (i) pay all amounts owed to us; (ii) de-identify and otherwise stop using the Marks in any manner, including in business names and telephone listings; (iii) return all Confidential Information and customer lists to us; (iv) comply with post-term non-competition covenants; and (v) deliver proof of compliance. |
| j. | Assignment of contract by franchisor | Section 10.A | No restriction on our right to assign. |
| k. | "Transfer" by franchisee – definition | Section 10.B | Includes transfer or assignment of the Franchise Agreement, Clear Pest Pros Business or any part thereof, and any change of your ownership in franchisee entity. |
| l. | Franchisor's approval of transfer by franchisee | Section 10.B | We must approve all transfers, but we will not unreasonably withhold our approval if you meet our conditions. |
| m. | Conditions for franchisor approval of transfer | Section 10.B | Conditions to transfer: (i) you are in full compliance with the Franchise Agreement or any other related agreement and you have paid all accrued monetary obligations; (ii) the transferee meets our then current standards; (iii) the transferee is not operating a competitive business, unless all competitive services as part of Clear Pest Pros Business; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION. (FDD pages 58–63)
What This Means (2025 FDD)
According to Clear Pest Pros's 2025 Franchise Disclosure Document, the franchise agreement does require compliance with post-term non-competition covenants. Specifically, upon termination or early expiration of the Franchise Agreement, a franchisee's obligations include complying with these covenants, as detailed in Section 13 of the agreement.
The non-competition covenants extend for 18 months following the expiration or termination of the Franchise Agreement. During this period, the franchisee, their owners, and their Designated Manager are restricted from engaging in any capacity in a business offering actual light restoration and reconstruction services. They are also prohibited from soliciting business from customers of their former Clear Pest Pros business, diverting business or customers of Clear Pest Pros, or taking any action detrimental to the goodwill of the Clear Pest Pros Marks or System. These restrictions apply within the franchisee's former territory, the territories of other Clear Pest Pros franchisees or company stores, or within a 50-mile radius of the territory.
These post-term non-competition covenants are subject to state law, meaning their enforceability can vary depending on the jurisdiction. Prospective Clear Pest Pros franchisees should be aware of these restrictions and how they might impact their future business opportunities after leaving the Clear Pest Pros system. It is advisable to seek legal counsel to understand the specific implications of these covenants in their state.