How is the Exit Fee calculated for C12 Group franchisees who wish to avoid the non-compete?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
For two (2) years after the termination of this Agreement for any reason, Franchisee shall not directly or indirectly own an interest in or otherwise be employed by or engaged with a Competitive Business within the Territory, within ten (10) miles of the Territory, within the territory of any other C12 franchise, or within ten (10) miles of the territory of any other C12 franchise. For purposes of this Section, a "Competitive Business" is any business that offers peer mentorship and coaching to Christian business leaders. The post-termination non-competition obligations under this Section shall not apply if Franchisee pays Franchisor the Exit Fee described above.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
Based on the 2025 C12 Group Franchise Disclosure Document, franchisees are subject to a post-termination non-compete agreement for two years after the termination of the agreement. This non-compete restricts them from owning an interest in or being employed by a Competitive Business, defined as any business that offers peer mentorship and coaching to Christian business leaders, 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.
However, the FDD states that this post-termination non-competition obligation does not apply if the franchisee pays C12 Group an Exit Fee. The excerpt does not specify how the Exit Fee is calculated.
Prospective franchisees should inquire with C12 Group about the specific calculation method for the Exit Fee, as it is not detailed in this section of the FDD. Understanding this calculation is crucial for franchisees who may consider exiting the franchise system and wish to avoid the non-compete restrictions.