On what basis are C12 Group's monthly Royalty Fees established?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
While Franchisee's monthly Royalty Fee is established solely based on each month's membership roster and billings, Franchisee is solely responsible for invoicing and collecting registration fees and membership fees from Franchisee's members and setting collections policies and standards.
Franchisee will pay Franchisor Royalty Fees based on Franchisee's membership roster and billings regardless of whether Franchisee actually collects the registration and/or membership fees from its members.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the monthly Royalty Fee is based on the franchisee's membership roster and billings for that month. This means that the amount a C12 Group franchisee owes in royalties each month is directly tied to the number of members they have and the fees they bill those members.
However, the franchisee is responsible for invoicing and collecting registration and membership fees from their members. The royalty fees owed to C12 Group must be paid regardless of whether the franchisee actually collects those fees from its members. This creates a potential risk for the franchisee, as they are obligated to pay royalties even on uncollected revenue.
Franchisees have the ability to set their own registration fees and monthly membership fees based on local economic conditions. However, these pricing changes must be reviewed in advance with C12 Group. This allows franchisees to tailor their pricing to their specific market, but it also requires them to get approval from C12 Group before making any changes. C12 Group must also be notified of any modifications to member application/covenant forms.