What is the C12 Group's Baseline Target based on when a franchisee expands their territory?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall pursue the business plan developed during Franchisee's New Chair Training and strive to achieve a ten percent (10%) market penetration of the businesses within the Territory that qualify for C12 membership (the "Baseline Target"). Franchise's Baseline Target is set forth in Section V.1. of this Agreement. Within twenty-four (24) months of opening for business, Franchisee must achieve the greater of (i) thirty-three percent (33%) of the Baseline Target or (ii) at least one (1) CEO Forum with at least ten (10) CEO Members. Franchisee must achieve fifty percent (50%) of the Baseline Target and have at least ten (10) CEO Members within three (3) years of opening for business. If Franchisee fails to achieve either of these performance levels, Franchisee shall have ninety (90) days in which to meet such levels or, if permitted by Franchisor, ninety (90) days in which to make substantial progress in good faith, as determined in Franchisor's sole discretion, toward such levels. If Franchisee fails to achieve these performance levels within ninety (90) days of receiving notice from Franchisor, Franchisor may, in its sole discretion, redefine the Territory or terminate the Franchise
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not specify the Baseline Target for C12 Group franchisees when they expand their territory. However, the document does define the Baseline Target in general terms.
According to the FDD, C12 Group defines the Baseline Target as a 10% market penetration of businesses within the franchisee's territory that qualify for C12 membership. The franchisee must achieve certain milestones within specific timeframes to maintain exclusivity. Within 24 months of opening, the franchisee needs to reach the greater of 33% of the Baseline Target or have at least one CEO Forum with a minimum of 10 CEO Members. Within three years of opening, the franchisee must achieve 50% of the Baseline Target and have at least 10 CEO Members.
If a C12 Group franchisee fails to meet these performance levels, the franchisor has the right to redefine the territory or terminate the franchise agreement. The franchisor determines the Baseline Target using publicly available data, including business census data and research data on the percentage of practicing or evangelical Christians in the region.
To understand the Baseline Target requirements for territory expansion, a prospective C12 Group franchisee should ask the franchisor directly about the specific performance metrics and conditions that apply when a franchisee seeks to expand into additional territories. This information is crucial for planning and ensuring the franchisee can meet the franchisor's expectations for growth and market penetration.