Is the C12 Group Exit Fee calculated based on gross revenue?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
inancial impact cannot be reasonably estimated at this time.
5. Reclassification
Certain amounts in the 2021 consolidated financial statements have been reclassified to conform to the 2022 presentation.
6. Franchise Fees
The Company executes franchise agreements that set the terms of its arrangement with each franchisee, or Area Chair. The franchise agreements require the franchisee to pay (1) an initial, non-refundable territory fee of $20,000 per franchise unit; (2) a prepaid marketing deposit of $10,000; (3) a training and support fee of $10,000 ($7,500 for Associate Chairs), which is refundable prior to the start of training; (4) continuing fees based upon a percentage of monthly member billings ranging from 17.5% to 30%; and (5) a new member registration fee ranging from $250 to $425 depending on membership type. Franchise agreements are renewed annually if both the Company and franchisee agree and the franchisee is in good standing.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
Based on the 2025 C12 Group Franchise Disclosure Document, there is no mention of an "Exit Fee" or how such a fee would be calculated. The document does describe various fees that C12 Group franchisees are required to pay. These include an initial non-refundable territory fee of $20,000 to $25,000, a prepaid marketing deposit of $10,000, a training and support fee of $7,500 to $12,500, continuing fees based on a percentage of monthly member billings (ranging from 12% to 30%), and a new member registration fee ranging from $250 to $500. There is also a $6,000 transfer fee associated with the sale or transfer of a C12 Group franchise.
Since the FDD does not specify the existence of an exit fee or its calculation method, it's important for potential franchisees to seek clarification from C12 Group regarding any potential fees associated with exiting the franchise agreement. Understanding all potential costs, including those related to termination or non-renewal, is crucial for making an informed investment decision.
Prospective franchisees should inquire directly with C12 Group about the existence of any exit fees, the specific circumstances under which they might be applied, and the method used to calculate such fees. This information is essential for a complete understanding of the financial obligations associated with the C12 Group franchise.