What is the 'Baseline Target' for a C12 Group franchisee, as defined in the agreement?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
a. Baseline Target Performance. 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
Agreement.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the "Baseline Target" for a franchisee is defined as achieving a ten percent (10%) market penetration of businesses within their territory that qualify for C12 membership. This target is based on the business plan developed during the franchisee's New Chair Training. The specific Baseline Target for each franchise is detailed in Section V.1 of the Franchise Agreement.
Within 24 months of opening, a C12 Group franchisee must reach the greater of (i) thirty-three percent (33%) of the Baseline Target or (ii) at least one CEO Forum with a minimum of ten (10) CEO Members. Furthermore, within three years of opening, the franchisee is required to achieve at least fifty percent (50%) of the Baseline Target and have at least ten (10) CEO Members.
Failure to meet these minimum performance levels can result in consequences. C12 Group may provide the franchisee with a 90-day period to meet the required levels or demonstrate substantial progress in good faith. If the franchisee still fails to meet the targets after this period, C12 Group reserves the right to redefine the territory or even terminate the Franchise Agreement. This underscores the importance of thorough market assessment and diligent execution of the business plan to achieve the Baseline Target and maintain the franchise.