If C12 Group takes ownership of a franchise, under what circumstances is this likely to occur?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must achieve a minimum level of target market penetration to maintain exclusivity within Territory.
Franchisor defines Franchisee's "Baseline Target" using publicly available data, including, without limitation, the relevant Intelligent Direct, Inc (IDI) dba GbBIS business census in the Territory and research data provided by The Barna Group on the percentage of 'practicing Christians' or 'evangelical Christians' by region to establish the market potential in regard to the number of prospective member companies within the Territory.
Franchisee must achieve the minimum performance levels set forth in Section IV.8.a. to maintain exclusivity within the Territory.
If Franchisee fails to achieve such minimum performance levels, Franchisor may reduce the size of Franchisee's Territory, authorize another franchisee to operate a C12 Group franchise within Franchisee's Territory, or operate a C12 Group business within Franchisee's Territory.
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 may operate a C12 Group business within a franchisee's territory under specific circumstances related to performance standards. If a franchisee fails to achieve the minimum performance levels set forth in Section IV.8.a, C12 Group has the right to take certain actions. These actions include reducing the size of the franchisee's territory, authorizing another franchisee to operate within the original franchisee's territory, or directly operating a C12 Group business within that territory.
This provision is tied to the franchisee's ability to penetrate the target market and maintain exclusivity within their designated territory. C12 Group defines a franchisee's "Baseline Target" using publicly available data, such as business census data from Intelligent Direct, Inc (IDI) dba GbBIS and research data from The Barna Group on the percentage of 'practicing Christians' or 'evangelical Christians' by region. This data helps establish the market potential in terms of prospective member companies within the territory.
For a prospective franchisee, this means that maintaining minimum performance levels is crucial to retaining the exclusive rights to their territory. Failure to meet these standards could result in C12 Group either shrinking the territory, allowing another franchisee to compete within it, or directly competing with the existing franchisee by operating their own C12 Group business in the area. This underscores the importance of understanding the specific performance metrics outlined in Section IV.8.a of the franchise agreement and developing a robust business plan to achieve those targets.