How does C12 Group define 'significant' in the context of pending litigation and the franchise system's financial condition?

According to the 2025 FDD, C12 Group does not provide a specific definition of what constitutes 'significant' pending actions. However, the document indicates that pending actions, other than routine litigation incidental to the business, are considered significant if they are significant in the context of the number of franchisees and the size, nature, or financial condition of the franchise system or its business operations.

For a prospective C12 Group franchisee, this means that the determination of whether a pending action is 'significant' is based on a qualitative assessment of its potential impact on the franchise system as a whole. This assessment considers factors such as the number of franchisees, the overall size and nature of the C12 Group business, and its financial health.

Because there is no concrete definition of 'significant,' it is important for a prospective franchisee to carefully review Item 3 of the FDD, which discloses any pending litigation against C12 Group, its predecessors, or affiliates. If there are pending actions, the franchisee should assess the potential impact of these actions on the franchise system and seek clarification from C12 Group regarding their assessment of the significance of the litigation. It would be prudent to consult with a legal professional to evaluate the potential risks associated with any disclosed litigation.