What post-termination obligations must the seller affirm and comply with when transferring a Clear Pest Pros franchise?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
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- You must affirm and comply with your post-termination obligations, including, without limitation, such obligations set forth in Sections 6 or 13.
B. MARKS.
Upon the termination or expiration of this Agreement, you promise to:
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- strictly comply with, observe, and abide by all of the post-termination provisions of this Agreement, including those as set forth in Sections 5, 6 and 13.D of this Agreement;
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- neither directly nor indirectly represent to the public that any other business you may then own or operate, is or was operated as, or was in any way connected to, the System;
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- not hold yourself out or advertise in any context that you are a present franchisee or were a former franchisee of ours;
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- immediately refrain from engaging in any business relationship with any contacts with Customers or former Customers of the Clear Pest Pros Business, whether with respect to collection of accounts receivable, providing Services, or for any other purpose whatsoever;
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- assign any and all accounts receivable to us for collection, unless all Royalties and other payment obligations to us are paid in full. In connection with this assignment, you appoint us as attorney-in-fact to engage in these collection activities and you specifically refrain from engaging in any of these collection activities. We promise to employ good faith efforts, including where appropriate in our sole and exclusive judgment the commencement of legal proceedings to collect the accounts receivable. We have no duty or obligation to you to accomplish the collection of such accounts receivable. We will remit to you any of these sums collected after first deducting all moneys owed to us and our costs of collection;
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- immediately cease operation under this Agreement and not operate or do business under any name or in any manner which might tend to give the general public the impression that you are operating a Clear Pest Pros Business, or any confusingly similar business;
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to the 2025 FDD, a franchisee transferring their Clear Pest Pros business must affirm and comply with post-termination obligations as outlined in Sections 6 or 13 of the franchise agreement. These obligations include strictly adhering to all post-termination provisions detailed in Sections 5, 6, and 13.D of the agreement. This ensures that the franchisee understands and agrees to abide by the rules that come into effect after the franchise agreement ends.
Specifically, the franchisee must not represent any other business as connected to the Clear Pest Pros system, nor can they advertise themselves as a current or former franchisee. They must also cease any business relationship with customers or former customers of the Clear Pest Pros business. This includes refraining from collecting accounts receivable or providing services.
Furthermore, the franchisee is required to assign all accounts receivable to Clear Pest Pros for collection, unless all royalties and other payment obligations are paid in full. Clear Pest Pros will then employ good faith efforts to collect these receivables, deducting any owed amounts and collection costs before remitting any remaining sums to the franchisee. Finally, the franchisee must immediately stop operating under the agreement and avoid any actions that might mislead the public into thinking they are still part of the Clear Pest Pros system.