What is the dependency between paying the exit fee and the post-termination non-competition obligations for C12 Group franchisees?

According to C12 Group's 2025 Franchise Disclosure Document, a franchisee's post-termination non-competition obligations are contingent upon whether they pay an exit fee to C12 Group. Specifically, for two years after the termination of the Franchise Agreement, the franchisee is restricted from owning an interest in, being employed by, or engaged with a Competitive Business within their territory, within ten miles of their territory, within the territory of any other C12 Group franchise, or within ten miles of any other C12 Group franchise's territory. A Competitive Business is defined as one that offers peer mentorship and coaching to Christian business leaders.

However, this non-competition obligation is waived if the franchisee pays C12 Group an Exit Fee. The Exit Fee is calculated as the average Royalty Fees paid to C12 Group over the three months preceding the franchisee's notice of termination, multiplied by twelve.

In practical terms, a C12 Group franchisee who wishes to avoid the two-year non-compete restriction after termination has the option to pay the Exit Fee. This provides flexibility for franchisees who may want to continue working in a similar field after leaving the C12 Group system. The decision to pay the Exit Fee would depend on the franchisee's future business plans and whether they intend to engage in a Competitive Business as defined by C12 Group.