What constitutes a material breach of the C12 Group agreement that could lead to immediate termination?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to not purposely solicit (either directly or indirectly) any prospective C12 member who lives and works in the territory of another C12 franchisee. Such 'poaching' is deemed by C12 to be a material breach of this Agreement that strikes at the unity of the C12 franchise system and is grounds for termination upon notice to Franchisee. If one of Franchisee's C12 members desires, for any reason, to consider becoming a member of a Business Forum in another C12 franchisee's territory and personally initiates a request to transfer their membership to another group, Franchisee shall enable the member to attend a full meeting in the other group (presuming room exists for their potential membership) before they reach a final decision. This C12 policy is aimed at serving the best
interests of each member and is ultimately deemed as the best policy for C12 franchisees. In such a scenario, Franchisee agrees that there will be no compensation to either Franchisee or the other C12 franchisee as a result of a member choosing to make such a transfer.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee engaging in 'poaching' activities is considered a material breach of the agreement, potentially leading to termination. Specifically, purposely soliciting prospective C12 members who reside and work within another C12 franchisee's territory is viewed as detrimental to the unity of the C12 franchise system.
However, the FDD outlines a specific exception to this rule. If a C12 member independently seeks to transfer their membership to a Business Forum in another franchisee's territory, the original franchisee must allow the member to attend a meeting with the other group, assuming there is space available. This policy prioritizes the member's best interests and is considered the optimal approach for C12 franchisees.
In such a transfer scenario initiated by the member, the FDD explicitly states that neither the original franchisee nor the receiving franchisee will receive any compensation as a result of the member's decision to transfer. This reinforces the emphasis on member choice and discourages franchisees from actively interfering with member decisions to protect their own financial interests. This policy aims to foster collaboration and goodwill among franchisees within the C12 Group system.