If a C12 Group franchisee asks C12 to purchase their business, what rights does C12 have?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
pensation to either Franchisee or the other C12 franchisee as a result of a member choosing to make such a transfer.
X. Transfer, Sale, or Assignment
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- Recognizing the value of consistency and standardization across franchisees in fostering the goodwill and reputation of the C12 franchise 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 release of Franchisor and a new franchise agreement has been signed with the transferee if more than fifty percent (50%) of the Franchised Business is transferred.
- a. If Franchisee suspends, for temporary reasons out of Franchisee's control (e.g., health, disability or death), normal operations of the Franchised Business for a period of sixty (60) da
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, C12 Group has the right to approve all sales and transfers of the franchised business or any interest in the franchisee, especially if the franchisee is an entity. 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.
C12 Group may require the franchisee or transferee to execute C12 Group's current franchise agreement, which may have different terms than the original agreement. C12 Group can also set conditions for its approval of any transfer. These conditions may include evaluating the successor or transferee's qualifications and business plan, ensuring the transferee successfully completes New Chair Training, and receiving a $6,000 transfer fee.
Furthermore, if the transferee acquiring the entire franchised business is not an existing C12 Group franchisee, they must pay C12 Group a training fee. The transfer is only approved once the transferee is deemed 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 if more than 50% of the franchised business is transferred.
In the event that a C12 Group franchisee suspends normal business operations for 60 days or more due to reasons outside of their control, such as health issues, disability, or death, C12 Group will attempt to assist in overseeing the continuation of the franchised business through a transition period lasting no more than six months. This highlights C12 Group's interest in maintaining consistency and service continuity within its franchise system.