What is the condition for the C12 Group franchisee to pay continuing fees?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
s were presented on a consolidated basis and all significant intercompany accounts and transactions eliminated.
Revenue Recognition: A majority of the Company's revenues are derived from franchise fees. Franchise agreements generally require the franchisee to pay 1) an initial non-refundable territory fee of $25,000 per franchise unit, 2) a prepaid marketing deposit of $10,000, 3) a training and support fee of $10,000 to $12,500, which is refundable prior to the start of training, 4) continuing fees based upon a percentage of monthly member billings ranging from 12% to 30%, and 5) a new member registration fee ranging from $300-500.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, franchisees are obligated to pay continuing fees based on a percentage of their monthly member billings. These fees range from 12% to 30% of the monthly billings. This means that the more a franchisee bills its members each month, the higher the continuing fees they will owe to C12 Group.
The FDD also specifies that C12 Group franchisees must pay royalty fees based on their membership roster and billings, regardless of whether the franchisee actually collects the registration and/or membership fees from its members. This is a critical point for prospective franchisees to understand. Even if a member fails to pay, the franchisee is still responsible for paying the royalty fees to C12 Group based on the initial billing. This places the risk of non-payment squarely on the franchisee.
This type of arrangement is fairly standard in the franchise industry, where franchisors typically collect ongoing royalties as a percentage of gross sales or billings. However, the specific percentage can vary widely across different franchise systems. Prospective C12 Group franchisees should carefully consider the implications of this fee structure and ensure they have a robust system for managing member payments and collections to mitigate the risk of paying royalties on uncollected revenue.