How does C12 Group determine a franchisee's Baseline Target?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
ut will endeavor to jointly discuss and plan such changes in advance. Each franchisee's Baseline Target is established on a case-by-case basis. C12 also reserves the unilateral right to terminate a Franchise Agreement for nonperformance after a 90-day right to cure on the part of the franchisee. C12 reserves the right to require additional Baseline Target requirements after 36 months, including achieving greater than 100% of your original Baseline Target (see the example at the end of this Item 12), in order to ensure continued market growth and development. Your original Baseline Target only represents 10% of the estimated number of evangelical CEOs and senior business managers employed by companies in your Territory. During the initial launch period, the franchisee will be responsible for demonstrating good faith development pursuits demonstrated by execution of the business plan crafted during New Chair Training or making at least eight new contacts per week until two CEO Forums are operating with more than six members each. C12 reserves the right to impose a cure process in subsequent months in the case of failure to demonstrate good faith development of a Territory.
You may not solicit current or prospective C12 members who live and work outside your own Territory via direct (e.g., face-to-face, telephone, direct mail, telemarketing, email) or indirect means (e.g., via third parties, other channels of distribution such as the Internet or mutual friends). Any solicited or unsolicited inquiries from outside your Territory will necessitate that the candidate be given the opportunity to attend any Business Forum meeting in their home Territory (i.e., their 'local' CEO Forum) as well as your Business Forum before selecting the specific Business Forum they would like to join. If contacted by such a prospect, you must inform them that there is another C12 Business Forum option and provide contact information for the applicable franchisee. The qualified prospective member is free to elect, based on their own needs, priorities, and evaluation, which Business Forum they would like to join.
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the Baseline Target is the specific number of C12 Group members for a given territory, representing a calculated level of market penetration. C12 Group determines this target using the number of companies in the territory, the applicable Evangelical Rate for the region, and a 10% market penetration rate. This calculation is based on business census data from IDI for businesses with 10 or more full-time employees and $1 million or more in revenue. The 10% penetration rate is considered a reasonable and customary formula for establishing franchise territories. Each franchisee's Baseline Target is established on a case-by-case basis. Your original Baseline Target only represents 10% of the estimated number of evangelical CEOs and senior business managers employed by companies in your Territory.
For example, the FDD states that the Baseline Target for Indianapolis is calculated as follows: 5,590 Target Companies x 15% Evangelical Rate x 10% Market Penetration Rate = 84 C12 CEO Members. The number of Units corresponding to that Territory would be equal to 3.49, calculated as follows: 5,590 Target Companies x 15% Evangelical Rate x 10% Market Penetration / 24 CEOs per Unit = 3.49.
Prospective franchisees should understand that failing to meet minimum required levels of target market penetration (33% of Baseline Target within 24 months and 50% within 36 months) could lead to C12 Group redefining the territory definitions. C12 Group also reserves the right to require additional Baseline Target requirements after 36 months, including achieving greater than 100% of your original Baseline Target, in order to ensure continued market growth and development. During the initial launch period, the franchisee will be responsible for demonstrating good faith development pursuits demonstrated by execution of the business plan crafted during New Chair Training or making at least eight new contacts per week until two CEO Forums are operating with more than six members each. C12 reserves the right to impose a cure process in subsequent months in the case of failure to demonstrate good faith development of a Territory.