What constitutes 'abandonment of the Franchised Business' that would allow C12 Group to terminate the franchise agreement immediately?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may terminate this Agreement immediately, upon written notice to Franchisee, should any of the following occur: (i) Franchisee or any member or owner of Franchisee receiving a criminal conviction, entering a guilty plea, or entering a plea of nolo contendere with respect to any felony or crime of moral turpitude; (ii) the abandonment of the Franchised Business or sustained inability of Franchisee to productively engage in the Franchised Business; (iii) an unapproved transfer of Franchise responsibility or any ownership interest(s) in Franchisee if Franchisee is an entity; (iv) Franchisee's filing of bankruptcy or making of an assignment for the benefit of creditors; and/or (v) unrepentant behavior by Franchisee or any member or owner of Franchisee that strikes at the unity of those engaged in C12 as Area Chairs and members.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, C12 Group can terminate the franchise agreement immediately with written notice if the franchisee abandons the franchised business. The FDD also states that C12 Group can terminate the agreement immediately if the franchisee demonstrates a sustained inability to productively engage in the franchised business.
This means that if a C12 Group franchisee stops operating their franchise or is unable to effectively run the business, C12 Group has the right to terminate the agreement without giving the franchisee an opportunity to correct the issue. This is a significant risk for franchisees, as it means they could lose their franchise if they are unable to operate it successfully for any reason.
It is important to note that the FDD does not define what specifically constitutes 'abandonment' or 'sustained inability'. This lack of clarity could lead to disputes between C12 Group and its franchisees. A prospective franchisee should seek clarification from C12 Group on what specific actions or inactions would be considered abandonment or sustained inability to operate the business.
In addition to abandonment, C12 Group can also terminate the agreement immediately if the franchisee or any member or owner of the franchisee receives a criminal conviction, enters a guilty plea, or enters a plea of nolo contendere with respect to any felony or crime of moral turpitude; an unapproved transfer of Franchise responsibility or any ownership interest(s) in Franchisee if Franchisee is an entity; Franchisee's filing of bankruptcy or making of an assignment for the benefit of creditors; and/or unrepentant behavior by Franchisee or any member or owner of Franchisee that strikes at the unity of those engaged in C12 as Area Chairs and members.