Does the Clear Pest Pros franchisor have to exercise their remedies in case of default by the franchisee?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to our right to terminate this Agreement, and not in lieu of such right, or any other rights we may have against you, upon a failure to cure any default within the applicable time period (if any), we have the right, but not the obligation, to: (1) charge the Non-Compliance Fee; (2) reduce the size of your Territory or permit other franchisees or Company Stores to provide the Services and Products with your Territory; and/or (3) enter upon the Clear Pest Pros Business premises and exercise complete authority with respect to the operation of the Clear Pest Pros Business until such time as we determine, in our sole discretion that the default has been cured, and you are otherwise in compliance with this Agreement. In the event we exercise the rights described in this Section, you must pay us a reasonable management fee of 10% of Gross Sales and reimburse us for all reasonable costs and overhead, if any, incurred in connection with our operation of your Clear Pest Pros Business including, without limitations, costs of personnel for supervising and staffing the Clear Pest Pros Business and their travel and lodging accommodations, plus a 20% service charge.. This fee is in addition to the payment of the Royalty and all other fees due under this Agreement during the time we exercise our rights under this Agreement. If we undertake to operate the Clear Pest Pros Business pursuant to this Section, you agree to indemnify and hold us (and our representative(s) and employees) harmless from and against any fines, claims, suits or proceedings that may arise out of our operation of the Clear Pest Pros Business.
Our delay in exercising or failing to exercise any right or remedy under this Agreement or our acceptance of any late or partial payment due hereunder will not constitute a waiver of any of our rights or remedies against you.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, the franchisor is not obligated to exercise its remedies in the event of a franchisee default. Specifically, Clear Pest Pros has the right, but not the obligation, to take certain actions upon a franchisee's failure to cure a default. These actions include charging a Non-Compliance Fee, reducing the franchisee's territory size, allowing other franchisees or company stores to operate within the franchisee's territory, or taking control of the Clear Pest Pros business premises.
If Clear Pest Pros chooses to exercise control over the business, the franchisee must pay a management fee of 10% of Gross Sales, reimburse all reasonable costs and overhead, and pay a 20% service charge. These fees are in addition to the standard royalty and other fees due under the Franchise Agreement. The franchisee also agrees to indemnify Clear Pest Pros against any claims or suits arising from the franchisor's operation of the business during this period.
The FDD also states that any delay or failure by Clear Pest Pros to exercise its rights or remedies, or acceptance of late or partial payments, does not constitute a waiver of those rights or remedies. This means Clear Pest Pros retains the ability to act on any default at a later time, even if they initially choose not to.