What interest rate applies to the promissory note for Clear Pest Pros?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
s Franchisee via a promissory note or other structured payment plan, Franchisee must continue to guarantee performance and all payment obligations to Franchisor under this Agreement until the final closing of the installment sale or final payment of such structured payment arrangement;
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- if you finance any part of the sale price of the transferred interest, then (a) you agree and will assure that all of the transferee's obligations under any promissory notes or agreements are subordinate to the transferee's obligation to pay Royalties and other amounts due to us and otherwise to comply with this Agreement, (b) you will not hold any security interest reserved in the business, and (c) you will enter into a comfort letter assuring us that the transferee will meet its obligations under the Franchise Agreement, and reaffirming your guaranty of the Franchise Agreement.
8. you pay us:
- a. our then-current Transfer Fee, as published in our Operations Manual. The Transfer Fee is due upon our preparation of the required transfer documentation (consent to transfer and assignment agreement and/or preparation of transferee's franchise agreement), and is non-refundable at such time;
- b. all Royalties for completed jobs up through the date of closing, fees, amounts owed under any promissory notes with us, Late Payment Fees, Late Report Fees, NSF Fees, Interest Fees, and all other fees or amounts owed to us, plus interest; and
- c. Our then-current Referral Fee, all commissions, broker fees or other similar expenses if: (i) you list the Clear Pest Pros Business with a broker, lead referral network or similar entity; or (ii) the transferee is referred to you or us by a broker, lead referral network or similar entity;
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- the transferee has successfully completed our Initial Training program;
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- the transferee must assume and agree to be bound by all outstanding obligations to customers and clients of the Clear Pest Pros Business;
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Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the interest rate for the promissory note with Clear Pest Pros is not explicitly stated. However, Item 22 discusses promissory notes in the context of franchise transfers and outstanding royalties and fees. Specifically, if a franchisee finances any part of the sale price to a transferee through a promissory note, the franchisee must ensure that the transferee's obligations under the note are subordinate to their obligations to pay royalties and other amounts due to Clear Pest Pros. Additionally, in the event you were awarded your Clear Pest Pros Business as a result of your purchase of all or substantially all of the assets of the Clear Pest Pros Business owned by a previous franchisee in the Territory, you promise to pay us any and all outstanding Royalties, and other Fees, amounts owed for purchases from us, Late Payment Fees, Late Report Fees, Interest Fees, NSF Fees and any other fees owed, plus interest, as well as any applicable broker fees, whether incurred by you or by your predecessor franchisee, if required by your agreement with predecessor franchisee.
Item 22 also mentions that outstanding royalties and fees from a predecessor franchisee will accrue interest. This implies that promissory notes related to franchise transfers or unpaid obligations may include interest charges. The franchisor also retains the right to contact Customers who are delinquent in their payment of 90 days or more, initiate collection procedures on your behalf, and take the full amount of any Royalties owed to us from any amounts collected and apply collection fees up to an additional ten percent (10%) (the "Collection Fee") of the amounts collected on your behalf.
Since the specific interest rate is not disclosed in the provided excerpts, prospective Clear Pest Pros franchisees should inquire directly with the franchisor about the interest rates applicable to any promissory notes they may be required to sign, either for initial financing or in the event of a transfer or purchase of an existing franchise. Understanding these rates is crucial for assessing the overall financial obligations and potential costs associated with the franchise.