Is a C12 Group franchisee responsible for setting collections policies and standards?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
While Franchisee's monthly Royalty Fee is established solely based on each month's membership roster and billings, Franchisee is solely responsible for invoicing and collecting registration fees and membership fees from Franchisee's members and setting collections policies and standards.
Franchisee will pay Franchisor Royalty Fees based on Franchisee's membership roster and billings regardless of whether Franchisee actually collects the registration and/or membership fees from its members.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, C12 Group franchisees are responsible for setting their own collections policies and standards. This means that the franchisee has the autonomy to determine how they will manage the process of collecting registration fees and membership fees from their members.
While C12 Group franchisees have the freedom to set their own collections policies and standards, they are still obligated to pay royalty fees to C12 Group based on their membership roster and billings, regardless of whether they actually collect the registration and/or membership fees from their members. This creates a financial responsibility for the franchisee to effectively manage their collections process.
This level of autonomy is fairly common in franchising, where franchisees are often given control over certain aspects of their business operations while adhering to the franchisor's overall system standards. Prospective C12 Group franchisees should carefully consider the implications of managing their own collections policies and standards, including the potential risks and rewards associated with this responsibility.