When does Clear Pest Pros recognize revenue from transfer fees?

According to Clear Pest Pros's 2025 Franchise Disclosure Document, transfer fees are recognized at the time the transfer occurs. This means that Clear Pest Pros accounts for the revenue from these fees when the actual transfer of a franchise agreement from one franchisee to another takes place.

For a prospective Clear Pest Pros franchisee, this accounting practice has implications for understanding the company's financial statements. When reviewing Clear Pest Pros's revenue recognition policies, it's important to note that transfer fees will only appear as revenue in the period when a transfer is completed. This can cause fluctuations in revenue from period to period, depending on the number of franchise transfers that take place.

This approach is fairly standard in the franchise industry, as it directly ties the recognition of revenue to the completion of the service (the transfer itself). Franchisees should be aware of this policy when evaluating the financial performance of Clear Pest Pros, as transfer fee revenue is not evenly distributed but rather recognized at a specific point in time.