How does C12 Group determine the Franchise Fee based on the territory?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
pliance with the C12 System Standards as set forth in the Franchise Agreement and the Operations Manual and
Playbooks.
V. Initial Franchise Fees
Franchisee acknowledges that the granting of this Agreement constitutes the sole consideration for the payment of the Initial Franchise Fees, which depend on the number of Territory Units granted to Franchisee. Franchisee's Initial Franchise Fees are comprised of the components below:
- Franchise Fee. Upon the execution of this Agreement, Franchisee must pay Franchisor a Franchise Fee as set forth below. The Franchise Fee varies based on the target market potential of the designated Territory for the Franchised Business. Franchise Units are $25,000 (with Franchise Unit otherwise already defined from a calculation basis) per 1.0 unit (Territories comprising between 0.9 and 1.1 units count as one (1) unit). Franchisor will determine the number of units that Franchisee's Territory constitutes. If a defined territory for purchase is less than or more than one (1) unit, the Franchise Fee shall be the number of units multiplied by $25,000 but no less than $12,500. For example, a metropolitan market with a defined territory containing an estimated 1.3 units worth of eligible members would result in a $32,500 Franchise Fee. On the other hand, a rural or less densely populated market representing 0.65 units would result in a $16,250 Franchise Fee. A Territory of 0.92 units would still consist of a $25,000 Franchise Fee whereas a market with 0.47 units would consist of a $12,500 Franchise Fee ($12,500 being the minimum). Other than as specific
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the franchise fee is determined by the target market potential within the designated territory. C12 Group assesses the market to assign a unit value to each territory, with a standard franchise unit priced at $25,000. Territories that fall between 0.9 and 1.1 units are counted as one full unit.
For territories defined as less than or more than one unit, the franchise fee is calculated by multiplying the number of units by $25,000, but with a minimum fee of $12,500. For instance, a metropolitan area estimated to contain 1.3 units would have a franchise fee of $32,500. Conversely, a rural market representing 0.65 units would result in a $16,250 franchise fee.
To illustrate further, a territory assessed at 0.92 units would still incur a $25,000 franchise fee, while a market with 0.47 units would be subject to the minimum fee of $12,500. The FDD specifies that this franchise fee is generally nonrefundable, with exceptions as provided in the agreement. The specific franchise fee applicable to a franchisee is detailed on the Summary Page of the Franchise Agreement.