For a C12 Group franchise, if the franchisee is an entity, how is the 'Principal Chair' defined?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
To simplify the language, this disclosure document uses "we," "us," "our," and "C12" to refer to The C12 Group, LLC, the franchisor. "You," "your," and "yours" refer to the individual, corporation, limited liability company, partnership, or other entity that buys a C12 franchise. "FDD" means this Franchise Disclosure Document. If the franchisee is an individual, the terms "franchisee" and "Principal Chair" as used in this FDD both refer to such franchisee. If the franchisee is an entity, the term "Principal Chair" means the person owning the largest percentage of voting equity in such franchisee entity, or the agent designated by the entity to be the responsible party(ies) operationally to the Franchisor. An "Associate Chair" is a person who is not a franchisee but who has been selected by both C12 and the franchisee to perform many of the same functions such as building and facilitating Business Forums within the Principal Chair's franchise area. An "Area Chair" is either a "Principal Chair" or an "Associate Chair."
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 8–9)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the definition of 'Principal Chair' depends on whether the franchisee is an individual or an entity. If the franchisee is an entity, such as a corporation or limited liability company, the term 'Principal Chair' refers to the person owning the largest percentage of voting equity in that entity. Alternatively, the Principal Chair can be the agent designated by the entity to be the responsible party operationally to C12 Group.
This distinction is important because the Principal Chair is the primary contact and responsible party for the franchise. If a franchisee is an individual, that individual automatically assumes the role of Principal Chair. However, if the franchisee is a business entity, C12 Group needs to clearly identify who within that entity holds the ultimate decision-making power or operational responsibility.
For prospective C12 Group franchisees considering forming a business entity to operate the franchise, it is crucial to understand this definition. The individual designated as the Principal Chair will be the main point of contact with C12 Group and will bear the responsibility for ensuring the franchise operates according to the franchise agreement. This designation should be made carefully, considering both ownership stake and operational capabilities within the entity.