What is the multiplier used in the calculation of the C12 Group Exit Fee?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
| then you do not pay or otherwise reimburse C12 for its cost of sending a representative. | |||
|---|---|---|---|
| Member Registration | Currently: CEO - $550 Key Players - $330 | Upon sign-up | Enrolls member and provides start-up kit. See Item 12 of this FDD for definitions of CEO and Key Player membership. This is amount due to C12, franchisee may charge more to the new member. |
| Transfer Fee | $6,000 | On date of transfer | Transfers of franchises are subject to C12's prior approval. |
| Exit Fee | The average Royalty Fees paid to us over the three (3) months preceding your notice of termination multiplied by twelve (12) | Upon termination by the franchisee, if applicable. | If Franchisee terminates this Agreement due to no fault of Franchisor and Franchisee engages in or intends to engage in a competitive business serving the same customers who were otherwise engaged as members in Franchisee's C12 Franchised Business, Franchisee shall pay Franchisor an exit fee equal to (a) the average Royalty Fees paid to Franchisor over the three (3) months preceding Franchisee's notice of termination (b) multiplied by twelve (12) ("Exit Fee"). |
Source: Item 6 — OTHER FEES (FDD pages 12–17)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the Exit Fee is calculated based on a multiplier of twelve (12). This Exit Fee comes into play if a franchisee terminates the agreement without fault on the part of C12 Group and then engages in a competitive business that serves the same customer base as their former C12 Group franchise.
Specifically, the Exit Fee is determined by first calculating the average Royalty Fees paid to C12 Group over the three months preceding the franchisee's termination notice. This average is then multiplied by twelve to arrive at the total Exit Fee amount. This fee is designed to compensate C12 Group for the potential loss of business and the investment they made in establishing the franchise.
For a prospective C12 Group franchisee, this means that exiting the franchise and immediately competing with it could result in a significant financial obligation. The Exit Fee is essentially equivalent to one year's worth of royalty payments, based on the average of the three months prior to termination. Franchisees should carefully consider this potential cost when evaluating the franchise opportunity and making decisions about their long-term business plans. It is important to note that this fee is only applicable if the franchisee terminates the agreement and engages in a competitive business.