Can a C12 Group franchisee terminate the agreement if the franchisor is at fault?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Termination by Franchisor Without Opportunity to Cure.
Franchisor may terminate this Agreement immediately, upon written notice to Franchisee, should any of the following occur: (i) Franchisee or any member or owner of Franchisee receiving a criminal conviction, entering a guilty plea, or entering a plea of nolo contendere with respect to any felony or crime of moral turpitude; (ii) the abandonment of the Franchised Business or sustained inability of Franchisee to productively engage in the Franchised Business; (iii) an unapproved transfer of Franchise responsibility or any ownership interest(s) in Franchisee if Franchisee is an entity; (iv) Franchisee's filing of bankruptcy or making of an assignment for the benefit of creditors; and/or (v) unrepentant behavior by Franchisee or any member or owner of Franchisee that strikes at the unity of those engaged in C12 as Area Chairs and members.
In the event that the franchisee is an entity, Franchisor may also exercise its termination rights pursuant to this section in the event that any of the foregoing shall occur with respect to any owner of such entity.
The provisions under this Section are subject to state and federal law.
Alternatives to Termination by Franchisor.
Franchisor may address by other means any breach of this Agreement that has not been satisfactorily cured by Franchisee within the applicable cure period.
These alternative measures include, without limitation and at Franchisor's sole discretion, the redefining of the franchise scope or Territory and/or the termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
The 2025 C12 Group Franchise Disclosure Document does not explicitly state conditions under which a franchisee can terminate the agreement due to the franchisor's fault. The document outlines circumstances where C12 Group can terminate the agreement with the franchisee, such as failure to cure a default after 30 days' notice, criminal convictions or acts of moral turpitude, abandonment of the franchised business, unapproved transfer of franchise responsibility, bankruptcy, or unrepentant behavior that disrupts the unity of C12.
However, the FDD does mention alternatives to termination by C12 Group, stating that C12 Group may address any breach of the agreement that the franchisee has not satisfactorily cured within the applicable cure period by other means. These alternative measures include redefining the franchise scope or territory.
Since the FDD does not provide information on the franchisee's ability to terminate the agreement based on the franchisor's actions, it is important for a prospective franchisee to seek clarification from C12 Group regarding the conditions under which a franchisee can terminate the agreement if C12 Group is at fault. Understanding these conditions is crucial for making an informed investment decision.