How often do C12 Group franchisees pay royalty fees?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will pay Franchisor Royalty Fees based on Franchisee's membership roster and billings regardless of whether Franchisee actually collects the registration and/or membership fees from its members.
8. Performance, Conduct, and Confidentiality
Franchisee shall adhere to and comply with Franchisor's basic business model and its various standard processes, due dates, and payments, as they may be revised from time to time in Franchisor's sole discretion.
Currently, these obligations of Franchisee include the
following:
- a.
Franchisee shall submit a monthly Area Chair Activity and Payment Report via the reporting system to Franchisor by the fifth (5th) business day of each month for the preceding month's activity.
Franchisee shall pay Franchisor a late fee of $100 each time this report is late.
Any unpaid Royalty Fees past-due greater than thirty (30) days will be subject to a monthly compounded interest rate of 1.5% or the maximum interest rate allowed by law.
Late fees and interest shall be paid in conjunction with Franchisee's payment of Royalty Fees.
In addition, if Franchisee requires a change to a monthly Area Chair Activity and Payment Report (not due to Franchisor's system error) after the fifth (5th) day of the following month, Franchisee must pay Franchisor a $99 fee to correct such error(s).
- b.
Franchisee shall pay Franchisor all fees due under this Agreement via ACH or check (or credit card with Franchisee paying the applicable transaction and processing fees), which must be received by Franchisor by the fifth (5th) day of the month.
- c.
Franchisor reserves the right to modify the due dates and methods of payment for all payments due under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, franchisees are required to pay royalty fees on a monthly basis. These fees are calculated based on the franchisee's membership roster and billings for that month. It is important to note that C12 Group franchisees must pay these royalty fees regardless of whether they have actually collected the membership fees from their own members.
Specifically, the franchisee must submit a monthly Area Chair Activity and Payment Report to C12 Group by the 5th business day of each month, detailing the previous month's activities. Payments for all fees due, including royalties, must also be received by C12 Group by the 5th day of the month. These payments can be made via ACH, check, or credit card, with the franchisee responsible for covering any transaction and processing fees associated with credit card payments.
C12 Group retains the right to modify the due dates and methods of payment for all fees. Failure to submit the monthly report on time results in a late fee of $100. Additionally, any unpaid royalty fees that are past due by more than 30 days will accrue interest at a monthly compounded rate of 1.5%, or the maximum rate allowed by law. These late fees and interest charges must be paid along with the royalty fees.
Prospective franchisees should be aware of these payment terms and ensure they have a system in place to manage their membership billings and payments efficiently to avoid late fees and interest charges. Understanding the financial obligations and maintaining timely payments is crucial for a successful franchise operation with C12 Group.