What is the condition for C12 Group to redefine exclusive and non-exclusive territory definitions?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
C12 grants exclusive territory to the C12 Principal Chairs (franchisees). If you fail to meet minimum required levels of target market penetration (i.e., 33% of Baseline Target within 24 months and 50% within 36 months of becoming a franchisee with at least one (1) CEO Forum with at least ten (10) CEO Members within two years of opening the business should 33% of Baseline Target be less than ten (10) CEOs), C12 has the unilateral right to redefine exclusive and non-exclusive Territory definitions but will endeavor to jointly discuss and plan such changes in advance. Each franchisee's Baseline Target is established on a case-by-case basis. C12 also reserves the unilateral right to terminate a Franchise Agreement for nonperformance after a 90-day right to cure on the part of the franchisee. C12 reserves the right to require additional Baseline Target requirements after 36 months, including achieving greater than 100% of your original Baseline Target (see the example at the end of this Item 12), in order to ensure continued market growth and development.
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, C12 Group grants franchisees an exclusive territory. However, C12 Group retains the right to redefine the definitions of exclusive and non-exclusive territories under specific conditions related to market penetration.
Specifically, if a C12 Group franchisee fails to meet the minimum required levels of target market penetration, C12 Group has the right to redefine territory definitions. The minimum penetration levels are defined as 33% of the Baseline Target within 24 months and 50% within 36 months of becoming a franchisee. There is also a requirement to have at least one CEO Forum with at least ten CEO Members within two years of opening the business, should 33% of the Baseline Target be less than ten CEOs.
While C12 Group has the unilateral right to redefine these territory definitions if the franchisee fails to meet the market penetration requirements, the FDD states that C12 Group will endeavor to jointly discuss and plan such changes in advance with the franchisee. C12 Group also reserves the right to terminate the Franchise Agreement for nonperformance after a 90-day right to cure on the part of the franchisee. Additionally, C12 Group can require additional Baseline Target requirements after 36 months, including achieving greater than 100% of the original Baseline Target, to ensure continued market growth and development.