For the C12 Group franchise agreement, which provisions remain binding on the parties after the agreement is terminated?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
All provisions of this Agreement which impose an obligation after termination of this Agreement shall survive termination of this Agreement and be binding on the parties.
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- Obligations Upon Termination. Upon termination of this Agreement for any reason, Franchisee shall perform the following:
a. Franchisee shall immediately cease using all programs, process formats, materials, forms, manuals, systems, slogans, signs, marks, symbols, websites, or designs used with the C12 Franchised Business and return all manuals and member information to Franchisor.
b. Franchisee shall pay Franchisor all past-due amounts plus late fees and interest as applicable.
c. Franchisee shall maintain the confidentiality of all C12 proprietary material or confidential business process or member information related to Franchisee's prior C12 Franchised Business as required by Section IV.8.c. of this Agreement.
d. Franchisee shall follow the post-termination process for communicating the termination of this Agreement with Franchisee's C12 members as outlined in Section IV.8.c. of this Agreement.
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- Post-Termination Non-Competition. 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 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, several provisions of the franchise agreement remain in effect even after the agreement is terminated. Specifically, any provision that imposes an obligation after the termination of the agreement will continue to bind both the franchisee and the franchisor. This ensures that certain responsibilities and duties do not simply disappear once the franchise relationship ends.
These surviving obligations include, but are not limited to, the franchisee's commitment to cease using C12 Group's programs, processes, materials, and intellectual property, and to return all manuals and member information to C12 Group. The franchisee must also pay any outstanding amounts owed to C12 Group, including past-due fees, late fees, and interest. Maintaining the confidentiality of C12 Group's proprietary material, confidential business processes, and member information is another critical obligation that extends beyond the termination of the agreement. Furthermore, the franchisee is required to follow a specific post-termination process for communicating the termination to their C12 members.
Additionally, for a period of two years post-termination, the franchisee is restricted from engaging in any Competitive Business within their former territory, within ten miles of that territory, or within or near any other C12 franchise territory. A Competitive Business is defined as one that offers peer mentorship and coaching to Christian business leaders. This non-compete clause can be waived if the franchisee pays C12 Group an Exit Fee. These measures are designed to protect C12 Group's interests and the integrity of its franchise system even after an individual franchise agreement concludes.