How can a C12 Group franchisee avoid the post-termination non-competition obligations?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee can avoid the post-termination non-competition obligations by paying C12 Group an Exit Fee.
The post-termination non-competition agreement states that for two years after the franchise agreement is terminated, the franchisee cannot own an interest in, be employed by, or be engaged with a competitive business within the franchisee's territory, within ten miles of the territory, within the territory of any other C12 Group franchise, or within ten miles of any other C12 Group franchise territory. A competitive business is defined as any business that offers peer mentorship and coaching to Christian business leaders.
The Exit Fee amount is equal to the average royalty owed to C12 Group over the three months preceding termination, multiplied by twelve. This provides a clear financial mechanism for a franchisee to be released from the non-compete obligations, allowing them to pursue other ventures without legal restrictions, provided they are willing to pay the specified fee.