What did The C12 Group disclose regarding franchise sales in Maryland during a period of non-registration?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
In the Matter of The C12 Group, LLC, Administrative Proceeding Before the Securities Commissioner of Maryland, Case No. 2011-0530. In responding to inquiries from the Maryland Securities Division as a result of an investigation into the franchise related activities of The C12 Group, LLC ("C12"), the Maryland Securities Commissioner ("Commissioner") concluded that grounds exist to allege that C12 violated the registration, disclosure and antifraud provisions of the Maryland Franchise Law and an Escrow Order of the Commissioner, in relation to the offer and sale of a C12 franchise. C12 disclosed that it sold a franchise in Maryland during a time it was not registered to offer and sell franchises in Maryland and that it did not deposit any initial fees paid by the franchisee into escrow account as required pursuant to a 2009 Escrow Order of the Commissioner. On May 15, 2012, the Commissioner and C12 agreed to enter into a consent order whereby C12, without admitting or denying any violations of law, agreed to: immediately and permanently cease from the offer and sale of franchises in violation of the Maryland Franchise Law; promptly file and diligently pursue an application for franchise registration in Maryland; and offer rescission to the franchisee who was sold a franchise in Maryland in violation of the Maryland Franchise Law.
Source: Item 3 — LITIGATION (FDD page 11)
What This Means (2025 FDD)
According to the 2025 FDD, C12 Group disclosed an administrative proceeding before the Securities Commissioner of Maryland, Case No. 2011-0530. The Commissioner alleged that C12 Group violated Maryland's franchise law concerning registration, disclosure, and antifraud provisions, as well as a 2009 Escrow Order. This stemmed from an investigation into C12 Group's franchise activities.
Specifically, C12 Group admitted to selling a franchise in Maryland when it was not registered to do so in the state. Additionally, C12 Group failed to deposit the initial franchise fees into an escrow account, as mandated by the Commissioner's 2009 Escrow Order.
To resolve the matter, on May 15, 2012, C12 Group and the Commissioner entered into a consent order. Without admitting or denying any legal violations, C12 Group agreed to immediately and permanently cease offering or selling franchises in Maryland until proper registration was obtained. C12 Group also committed to promptly applying for franchise registration in Maryland and offering rescission to the franchisee who purchased the franchise illegally.