What happens if a C12 Group franchisee does not meet the Training Week requirements?

C12 will determine whether New Chair Training has been satisfactorily completed. Training Week will typically involve an assessment to evaluate proficiency and readiness. While it is rare for an incoming franchisee to fail to complete training to our satisfaction, C12 reserves the right to make this determination and establish a remediation plan with the franchisee. C12 has the unilateral right to evaluate your personal abilities, aptitude, calling, fit, and financial ability to qualify as a C12 franchisee. Existing franchisees have the option to retake New Chair Training for a fee of $2,500.

III. Franchisor's Duties

1. New Chair Training. Before Franchisee commences operation, Franchisor will provide Franchisee with a mandatory five-week training program ("New Chair Training"), including four weeks of guided selfstudy combined with weekly live webinar training with a C12 Chair Trainer, followed by a one-week onsite training at Franchisor's Headquarters in San Antonio, TX ("Training Week"). By the conclusion of Training Week, Franchisor will determine in its sole discretion whether Franchisee has sufficiently demonstrated the ability to launch and successfully operate a C12 Franchised Business. If Franchisor determines that Franchisee has not satisfactorily completed New Chair Training, Franchisor will give Franchisee the option to either (i) complete a Remediation Plan or (ii) terminate the Franchise Agreement. If Franchisee elects to complete a Remediation Plan, Franchisor will specify actions that Franchisee must take and other requirements for Franchisee to meet in order to pass New Chair Training or, at Franchisor's option, Franchisee may attend a subsequent Training Week provided that Franchisee pay the additional cost of $2,500 plus travel, hotel, and meals. If Franchisee elects to terminate the Franchise Agreement, Franchisor will refund the Franchise Fee and any unspent portions of the Prepaid Marketing Fund, subject to Franchisee's agreement to remain bound by the confidentiality and non-competition obligations Franchisee previously agreed to under this Agreement before attending New Chair Training. Additionally, if Franchisor determines Franchisee is not making sufficient progress on a Remediation Plan, Franchisor reserves the right to give Franchisee written notice of termination of the Franchise Agreement. If Franchisor terminates the Franchise Agreement as provided for in this Section, Franchisor will refund only any unspent portions of the Prepaid Marketing Fund. All other franchise and training fees are non-refundable. Franchisor reserves the right to require Franchisee to re-attend New Chair Training if, in Franchisor's sole discretion, Franchisee

Source: Item 5 — INITIAL FEES (FDD pages 11–12)