For how long after termination of the C12 Group franchise agreement is the franchisee subject to a non-competition clause?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
For two (2) years after the termination of this Agreement for any reason, Franchisee shall not directly or indirectly own an interest in or otherwise be employed by or engaged with a Competitive Business within the Territory, within ten (10) miles of the Territory, within the territory of any other C12 franchise, or within ten (10) miles of the territory of any other C12 franchise. For purposes of this Section, a "Competitive Business" is any business that offers peer mentorship and coaching to Christian business leaders. The post-termination non-competition obligations under this Section shall not apply if Franchisee pays Franchisor the Exit Fee described above.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee is subject to a post-termination non-competition clause for two years after the franchise agreement ends, regardless of the reason for termination. This non-compete restricts the franchisee from owning an interest in, being employed by, or being engaged with a business that offers peer mentorship and coaching to Christian business leaders, which C12 Group defines as a "Competitive Business."
The geographic scope of this restriction includes the franchisee's territory, areas within ten miles of that territory, the territory of any other C12 Group franchise, and areas within ten miles of any other C12 Group franchise. This broad geographic restriction means a former franchisee could be significantly limited in their ability to work in the same industry after leaving the C12 Group system.
However, the FDD states that the post-termination non-competition obligations do not apply if the franchisee pays C12 Group an Exit Fee. The specific amount and terms of the Exit Fee are not detailed in this excerpt, so a prospective franchisee should clarify this with C12 Group. Understanding the Exit Fee is crucial, as it provides a potential avenue for a franchisee to avoid the non-compete restrictions and pursue other business ventures immediately after their C12 Group franchise agreement ends.