What is the definition of a 'Competitive Business' in the context of the C12 Group franchise agreement?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
For two (2) years after the termination of this Agreement for any reason, Franchisee shall not directly or indirectly own an interest in or otherwise be employed by or engaged with a Competitive Business within the Territory, within ten (10) miles of the Territory, within the territory of any other C12 franchise, or within ten (10) miles of the territory of any other C12 franchise. For purposes of this Section, a "Competitive Business" is any business that offers peer mentorship and coaching to Christian business leaders. The post-termination non-competition obligations under this Section shall not apply if Franchisee pays Franchisor the Exit Fee described above.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a 'Competitive Business' is defined specifically within the context of the post-termination non-competition clause. This clause restricts a franchisee from engaging with any business that offers peer mentorship and coaching to Christian business leaders for a period of two years after the termination of the franchise agreement.
This definition is important because it clarifies the scope of activities that a former C12 Group franchisee is prohibited from undertaking after leaving the franchise system. The restriction applies not only within the franchisee's original territory but also extends to areas within ten miles of that territory, as well as within and near any other C12 franchise territory. This broad geographic scope is designed to protect the C12 Group's market share and the integrity of its franchise network.
However, the FDD states that these post-termination non-competition obligations do not apply if the franchisee pays C12 Group an Exit Fee. This provides an option for franchisees who wish to continue in a similar line of work without being restricted by the non-compete agreement, offering flexibility in their post-franchise career choices. Prospective franchisees should carefully consider the implications of this definition and the associated restrictions, as well as the cost and feasibility of paying the Exit Fee, when evaluating the C12 Group franchise opportunity.