What is the condition for a C12 Group Franchisee to maintain exclusivity within their territory?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must achieve a minimum level of target market penetration to maintain exclusivity within Territory.
Franchisor defines Franchisee's "Baseline Target" using publicly available data, including, without limitation, the relevant Intelligent Direct, Inc (IDI) dba GbBIS business census in the Territory and research data provided by The Barna Group on the percentage of 'practicing Christians' or 'evangelical Christians' by region to establish the market potential in regard to the number of prospective member companies within the Territory.
Franchisee must achieve the minimum performance levels set forth in Section IV.8.a. to maintain exclusivity within the Territory.
If Franchisee fails to achieve such minimum performance levels, Franchisor may reduce the size of Franchisee's Territory, authorize another franchisee to operate a C12 Group franchise within Franchisee's Territory, or operate a C12 Group business within Franchisee's Territory.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, a franchisee must achieve a minimum level of target market penetration to maintain exclusivity within their territory. C12 Group defines the franchisee's "Baseline Target" using publicly available data, including business census data from Intelligent Direct, Inc (IDI) dba GbBIS and research data from The Barna Group on the percentage of 'practicing Christians' or 'evangelical Christians' by region. This data helps establish the market potential in terms of prospective member companies within the territory.
In practical terms, this means that a C12 Group franchisee's exclusive rights to their territory are contingent on meeting certain performance benchmarks related to market penetration. These benchmarks are determined by C12 Group using demographic and business data to estimate the potential number of member companies in the territory. A franchisee must then reach a certain percentage of this potential market to maintain their exclusivity.
If a C12 Group franchisee fails to meet these minimum performance levels, the franchisor has the right to take corrective actions. These actions can include reducing the size of the franchisee's territory, authorizing another franchisee to operate within the original franchisee's territory, or even operating a C12 Group business directly within that territory. This underscores the importance of thorough market analysis and proactive business development to ensure the franchisee can meet the required performance standards and retain their exclusive rights.
This type of performance-based exclusivity is fairly common in franchising, as it incentivizes franchisees to actively develop their market and prevents them from simply holding onto a territory without generating sufficient business. Prospective C12 Group franchisees should carefully review the specific minimum performance levels outlined in Section IV.8.a of the franchise agreement and assess their ability to meet those targets before investing in the franchise.