What happens if a C12 Group franchisee violates the restrictions on what they may sell?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
provided that you follow the same exceptions and restrictions above.
The Franchise Agreement is automatically renewed on a year-to-year basis until (1) either you give C12 a notice to discontinue at least 90 days prior to the end of the then-current term, or C12 gives you a notice to discontinue at least 90 days prior to the end of the then-current term, (2) either party should breach its terms or conditions, or (3) franchisee fails to consent to any updates or changes in the C12 business model and Operations Manual which may have occurred during the prior year by signing a Franchise Compliance Administrative Update letter each year. Compliance with the Field Operations Manual will be understood to include the Brand Standards, mandatory elements of the Meeting Playbook and One-on- One Playbook, and any standard components of the C12 member experience put forth by the C12 Group, LLC.
Except as specifically stated herein, we cannot engage in activities in your Territory that are competitive with your franchise. Nor can we operate, plan to operate, or franchise any businesses under a different trademark that will sell similar goods or services to those of this franchise in your Territory.
We have no right to solicit business for ourselves within your Territory that is competitive with your franchise, whether through alternative channels of distribution, whether via the Internet, catalogs, telemarketing, or otherwise.
We shall have the right to negotiate "enterprise" relationships with national brands and you shall agree to honor such enterprise pricing offered by us. Examples of the enterprise pricing and benefits that we may offer are (1) a 10% discount on first-year dues (as determined by the franchisee list price for local market) for new Members from certain organizations and (2) corporately discounted new membership kits and other benefits sponsored by us (e.g., access to digital products, discounts to events).
We do not pay any compensation to a franchisee for soliciting or accepting orders from inside the franchisee's Territory.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 36)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for C12 Group outlines specific consequences if a franchisee violates restrictions on what they are allowed to sell. According to Item 22, the franchise agreement is automatically renewed on a year-to-year basis unless either party breaches its terms or conditions. This implies that violating sales restrictions could be considered a breach of contract, potentially leading to non-renewal or termination of the agreement. Additionally, C12 Group has the right to modify the approved products or services at its sole discretion, and the franchisee must comply with such modifications. This suggests that failure to adhere to these changes could also result in a breach of contract.
Item 16 states that franchisees may only offer and sell services and products approved by C12 Group within their exclusive territory. They must also comply with C12 Group's rules, regulations, methods, procedures, programs, policies, standards, and Christian conduct as established in the Operations Manual, training, and the Franchise Agreement. Deviation from these standards, including selling unauthorized products or services, could be seen as a failure to comply with the agreement's terms.
Furthermore, Item 22 details specific operational obligations, stating that franchisees must adhere to and comply with C12 Group's basic business model and its various standard processes, due dates, and payments, as they may be revised from time to time in C12 Group's sole discretion. This reinforces the franchisor's control over the business model and the franchisee's responsibility to follow it. While the FDD does not explicitly state the exact penalties for violating sales restrictions, the cumulative effect of these clauses suggests that C12 Group has several avenues to address such violations, including non-renewal, termination, or other contractual remedies.