When is the C12 Group Exit Fee due?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
| then you do not pay or otherwise reimburse C12 for its cost of sending a representative. | |||
|---|---|---|---|
| Member Registration | Currently: CEO - $550 Key Players - $330 | Upon sign-up | Enrolls member and provides start-up kit. See Item 12 of this FDD for definitions of CEO and Key Player membership. This is amount due to C12, franchisee may charge more to the new member. |
| Transfer Fee | $6,000 | On date of transfer | Transfers of franchises are subject to C12's prior approval. |
| Exit Fee | The average Royalty Fees paid to us over the three (3) months preceding your notice of termination multiplied by twelve (12) | Upon termination by the franchisee, if applicable. | If Franchisee terminates this Agreement due to no fault of Franchisor and Franchisee engages in or intends to engage in a competitive business serving the same customers who were otherwise engaged as members in Franchisee's C12 Franchised Business, Franchisee shall pay Franchisor an exit fee equal to (a) the average Royalty Fees paid to Franchisor over the three (3) months preceding Franchisee's notice of termination (b) multiplied by twelve (12) ("Exit Fee"). |
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the Exit Fee is due upon termination by the franchisee, if applicable. Specifically, this fee applies if the franchisee terminates the agreement for reasons not attributable to C12 Group and then engages in a competitive business that serves the same customer base as their former C12 Group franchise.
The Exit Fee is calculated by averaging the Royalty Fees paid to C12 Group over the three months preceding the termination notice and then multiplying that average by twelve. This essentially amounts to one year's worth of royalty payments based on the recent performance of the franchise.
This condition is important for prospective franchisees to consider, as it could represent a significant financial obligation if they decide to leave the C12 Group system and start a competing business. It is designed to protect C12 Group's interests by discouraging franchisees from leveraging the knowledge and relationships gained within the C12 Group network to directly compete against it after terminating their franchise agreement.