Until what month and year is the term loan payable that Clear Pest Pros has guaranteed?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
hich relates to amounts advanced for working capital purposes and amounts due for expenses incurred by the Company on behalf of related parties.
Guarantee
The Company has guaranteed balances outstanding on the term loan and line of credit issued to Belfor Holdings, Inc. and other entities related through common ownership. In the event of a default by the affiliates, the Company could be obligated to repay the full amount outstanding on these loans. As of December 31, 2024, the affiliates' outstanding borrowings under the loans and the maximum potential future obligation under this guarantee totaled approximately $1,410 and $1,740, respectively. The term loan is payable through November 2030, and the line of credit expires in November 2028. In the event the Company is required to make payments under this guarantee, the Company cou
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 67)
What This Means (2025 FDD)
According to Clear Pest Pros' 2025 Franchise Disclosure Document, the company has guaranteed a term loan issued to Belfor Holdings, Inc. and other related entities. As of December 31, 2024, the outstanding borrowings for these affiliates totaled approximately $1,410, with a maximum potential future obligation of approximately $1,740 under the guarantee. The term loan is payable through November 2030.
This means that Clear Pest Pros has committed to cover the debt of its affiliates if they default on their loan obligations. If the affiliates fail to repay the term loan, Clear Pest Pros could be required to pay the full outstanding amount. While Clear Pest Pros could seek to recover these payments from the affiliate, it does not have specific recourse or collateral rights to ensure recovery.
For a prospective franchisee, this guarantee represents a potential financial risk. Although the franchisee is not directly liable for this debt, the financial health of the franchisor, Clear Pest Pros, could be impacted if it is forced to cover the affiliate's debt. This could affect the franchisor's ability to provide support and services to its franchisees. It is important for potential franchisees to consider this contingent liability when assessing the financial stability of Clear Pest Pros.