What is the geographic scope of the post-termination non-competition agreement for C12 Group franchisees?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 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 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, C12 Group's post-termination non-competition covenant restricts franchisees from engaging with a Competitive Business after the franchise agreement ends. This restriction lasts for two years, regardless of the reason for termination. A Competitive Business is defined as any business that offers peer mentorship and coaching to Christian business leaders.
The geographic scope of this restriction includes the franchisee's Territory, within ten miles of their Territory, within the territory of any other C12 Group franchise, and within ten miles of any other C12 Group franchise territory. This means a former franchisee cannot operate a competing business in their original territory or any nearby areas, nor can they operate in or near any other existing C12 Group franchise location.
However, the post-termination non-competition obligations do not apply if the franchisee pays C12 Group the Exit Fee. The FDD does not specify the amount of the Exit Fee, so a prospective franchisee should clarify this amount with C12 Group. Non-compete agreements are common in franchising to protect the brand's market share and customer relationships.