Does the C12 Group franchisee have to pay the Exit Fee immediately upon termination?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless stated otherwise in this Agreement, and subject to state law, Franchisee shall have thirty (30) days after receiving notice of default from Franchisor in which to cure any default arising from Franchisee's failure to perform its obligations under this Agreement.
If Franchisee fails to cure any default within thirty (30) days after receiving notice from Franchisor, Franchisor may terminate this Agreement upon notice to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee may be required to pay an exit fee if they terminate the agreement and engage in a competitive business serving the same customers who were members of their C12 Group franchise. The exit fee is calculated as the average Royalty Fees paid to C12 Group over the three months preceding the termination notice, multiplied by twelve.
The FDD does not explicitly state when the exit fee must be paid. However, it does state that upon termination of the agreement for any reason, the franchisee must pay C12 Group all past-due amounts plus late fees and interest, as applicable.
Because the FDD does not specify the payment terms for the exit fee, a prospective franchisee should clarify with C12 Group the specific payment schedule and any potential financing options for the exit fee to fully understand the financial implications of terminating the franchise agreement and engaging in a competitive business.