What is the C12 Group franchisee's obligation regarding payments to the franchisor?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
al C12 web functionality (e.g., search for other members, benchmarking, bulletin board/blog functions, etc.).
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- Specific Operational Obligations. Franchisee shall adhere to and comply with Franchisor's basic business model and its various standard processes, due dates, and payments, as they may be revised from time to time in Franchisor's sole discretion. Currently, these obligations of Franchisee include the
following:
- a. Franchisee shall submit a monthly Area Chair Activity and Payment Report via the reporting system to Franchisor by the fifth (5th) business day of each month for the preceding month's activity. Franchisee shall pay Franchisor a late fee of $100 each time this report is late. Any unpaid Royalty Fees past-due greater than thirty (30) days will be subject to a monthly compounded interest rate of 1.5% or the maximum interest rate allowed by law. Late fees and interest shall be paid in conjunction with Franchisee's payment of Royalty Fees. In addition, if Franchisee requires a change to a monthly Area Chair Activity and Payment Report (not due to Franchisor's system error) after the fifth (5th) day of the following month, Franchisee must pay Franchisor a $99 fee to correct such error(s).
- b. Franchisee shall pay Franchisor all fees due under this Agreement via ACH or check (or credit card with Franchisee paying the applicable transaction and processing fees), which must be received by Franchisor by the fifth
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, franchisees must adhere to the franchisor's standard processes, due dates, and payments, which may be revised. Franchisees must submit a monthly Area Chair Activity and Payment Report to C12 Group by the 5th business day of each month. A late fee of $100 is charged for late reports. Royalty Fees unpaid for over 30 days incur a monthly compounded interest rate of 1.5% or the maximum rate allowed by law. Additionally, franchisees must pay a $99 fee for any changes required to the monthly Area Chair Activity and Payment Report after the 5th day of the following month, unless the change is due to the franchisor's system error. These late fees and interest are to be paid along with the Royalty Fees.
All fees due under the Franchise Agreement must be paid via ACH, check, or credit card, with the franchisee covering any transaction and processing fees for credit card payments. These payments must be received by C12 Group by the 5th day of the month. C12 Group reserves the right to modify the due dates and methods of payment for all payments due under the agreement.
These payment obligations are typical in franchising, where timely payments are crucial for maintaining the franchise agreement and avoiding penalties. The potential for late fees and interest underscores the importance of adhering to the payment schedule. The franchisor's right to modify payment terms provides flexibility but also introduces a degree of uncertainty for the franchisee, who must stay informed of any changes.