Did The C12 Group admit or deny any violations of law in the consent order?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
In responding to inquiries from the Maryland Securities Division as a result of an investigation into the franchise related activities of The C12 Group, LLC ("C12"), the Maryland Securities Commissioner ("Commissioner") concluded that grounds exist to allege that C12 violated the registration, disclosure and antifraud provisions of the Maryland Franchise Law and an Escrow Order of the Commissioner, in relation to the offer and sale of a C12 franchise. C12 disclosed that it sold a franchise in Maryland during a time it was not registered to offer and sell franchises in Maryland and that it did not deposit any initial fees paid by the franchisee into escrow account as required pursuant to a 2009 Escrow Order of the Commissioner. On May 15, 2012, the Commissioner and C12 agreed to enter into a consent order whereby C12, without admitting or denying any violations of law, agreed to: immediately and permanently cease from the offer and sale of franchises in violation of the Maryland Franchise Law; promptly file and diligently pursue an application for franchise registration in Maryland; and offer rescission to the franchisee who was sold a franchise in Maryland in violation of the Maryland Franchise Law.
Source: Item 3 — LITIGATION (FDD page 11)
What This Means (2025 FDD)
According to the 2025 FDD, The C12 Group addressed allegations of violating Maryland franchise law through a consent order. The Maryland Securities Commissioner had concerns that C12 Group violated registration, disclosure, and antifraud provisions, along with an Escrow Order, related to franchise activities in Maryland. These concerns arose from an investigation where C12 Group disclosed it had sold a franchise in Maryland without proper registration and failed to deposit initial fees into an escrow account as required.
To resolve the matter, on May 15, 2012, The C12 Group and the Commissioner entered into a consent order. Crucially, The C12 Group did not admit or deny any violations of law as part of this agreement. Instead, C12 Group agreed to several actions, including immediately ceasing the offer and sale of franchises in Maryland until proper registration was obtained.
Furthermore, The C12 Group committed to promptly applying for franchise registration in Maryland and offering rescission to the franchisee who had been sold a franchise in violation of Maryland Franchise Law. This resolution allowed The C12 Group to address the Commissioner's concerns without a formal admission of wrongdoing, while also taking corrective actions to comply with Maryland franchise regulations. For a prospective franchisee, this indicates that C12 Group has taken steps to rectify past compliance issues, but it's important to note that the consent order was issued in 2012 and the company is now offering franchises in Maryland.