What happens to the franchise agreement if more than 50% of the C12 Group Franchised Business is transferred?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
chise system and Franchisor and the desire for service continuity to C12 members within Franchisee's Territory, Franchisor and Franchisee agree as follows:
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- Franchisor shall have the right to approve all sales and transfers of the Franchised Business or any interest in Franchisee if Franchisee is an entity. A transfer shall be deemed to occur when more than fifty percent (50%) of the equity ownership of Franchisee, as of the date this Franchise Agreement, is sold or transferred to a third-party. Such a sale or transfer will result in Franchisee and/or the transferee, as applicable, executing Franchisor's then-current form of franchise agreement, which may contain terms materially different than the Franchise Agreement. Franchisor may condition its consent to any transfer based on the evaluation of successor or transferee qualifications, business plan viability (including recognition of Franchise purchase terms), the transferee's successful completion of New Chair Training and payment of a $6,000 transfer fee. In addition, if the transferee acquiring the entire Franchised Business is not an existing C12 franchisee, they must pay Franchisor a training fee. The transfer is deemed approved only after the transferee has been deemed qualified to serve by Franchisor in its sole discretion, the transfer fee of $6,000 has been paid to Franchisor, all outstanding amounts owed by Franchisee to Franchisor have been paid in full, Franchisee (and its owners, if applicable) has executed a general re
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a transfer is considered to occur when more than 50% of the equity ownership of the franchisee is sold or transferred to a third party. If such a transfer occurs, the franchisee and/or the transferee will be required to execute C12 Group's current form of franchise agreement. The new agreement may contain terms that are materially different from the original franchise agreement.
C12 Group retains the right to approve all sales and transfers of the franchised business or any interest in the franchisee if the franchisee is an entity. C12 Group may also condition its consent to the transfer based on several factors. These include an evaluation of the successor or transferee's qualifications, the viability of their business plan (including recognition of franchise purchase terms), successful completion of New Chair Training, and payment of a $6,000 transfer fee.
Furthermore, if the transferee acquiring the entire C12 Group Franchised Business is not an existing C12 Group franchisee, they must pay C12 Group a training fee. The transfer is only deemed approved after the transferee is qualified by C12 Group, the $6,000 transfer fee is paid, all outstanding amounts owed by the franchisee to C12 Group are paid in full, the franchisee executes a general release of C12 Group, and a new franchise agreement is signed with the transferee.