What is the C12 Group's policy on changing a franchisee's territory definition?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
fee of $2,500.
ITEM 12: TERRITORY
You will have a specific exclusive Territory, which is defined mutually by C12 and you and should be incorporated in your business plan development in conjunction with C12. This Territory will be defined based on geography, in terms of cities, zip codes, counties, states, or the radius around your home address. There is no minimum granted Territory size. No other franchisee shall have the right to establish, acquire, or operate a franchise within your exclusive Territory. You must reside within your Territory unless we approve otherwise. You will have the exclusive right to offer C12 services, programs, and materials in your Territory via the hosting of CEO Forum meetings and Key Players Forum meetings in that geography, with the following exceptions and restrictions:
C12 Business Forum membership is open to all qualified business owners, CEOs, and general managers (and their staffs) who agree to comply with C12's behavioral protocols, maintain confidentiality, resolve conflict through biblical methods, and participate in the C12 'iron sharpening iron' peer group process which necessitates both listening and speaking in mutual 'business-as-ministry' efforts. All members must pledge to a non-solicitation protocol. Franchisee territory figures are based upon qualified/eligible individuals and, in good faith, all members of a Business Forum should meet or exceed minimum standards.
Once you have achieved two full Business Forums, you may also request an expansion of your Territory based on a proposed business plan. C12 must review and approve any such plan before it is pursued. Territory expansion will require a payment for each additional Unit of market potential (calculated as described in Item 5 & Item 7) according to C12's prevailing Franchise Fee (i.e., currently discounted for compliant franchisees seeking to expand at $20,000 per additional Unit). Any additional C12 Associate Chairs needed to service this expanded Territory must be mutually selected with the same high standards as Principal Chairs and trained according to C12's certification process. The cost for an Associate Chair for Training Weekis $10,000 and must be paid by the franchise and accompanied by a signed Associate Agreement at least two weeks prior to their Training Week. Franchise owners are required to complete the Associate Chair Checklist in coordination with the C12 Group development manager prior to Associate
Chair candidates attending New Chair Training to ensure alignment and success factors for new Area Chairs.
C12 grants exclusive territory to the C12 Principal Chairs (franchisees). If you fail to meet minimum required levels of target market penetration (i.e., 33% of Baseline Target within 24 months and 50% within 36 months of becoming a franchisee with at least one (1) CEO Forum with at least ten (10) CEO Members within two years of opening the business should 33% of Baseline Target be less than ten (10) CEOs), C12 has the unilateral right to redefine exclusive and non-exclusive Territory definitions but will endeavor to jointly discuss and plan such changes in advance. Each franchisee's Baseline Target is established on a case-by-case basis. C12 also reserves the unilateral right to terminate a Franchise Agreement for nonperformance after a 90-day right to cure on the part of the franchisee. C12 reserves the right to require additional Baseline Target requirements after 36 months, including achieving greater than 100% of your original Baseline Target (see the example at the end of this Item 12), in order to ensure continued market growth and development. Your original Baseline Target only represents 10% of the estimated number of evangelical CEOs and senior business managers employed by companies in your Territory. During the initial launch period, the franchisee will be responsible for demonstrating good faith development pursuits demonstrated by execution of the business plan crafted during New Chair Training or making at least eight new contacts per week until two CEO Forums are operating with more than six members each. C12 reserves the right to impose a cure process in subsequent months in the case of failure to demonstrate good faith development of a Territory.
You may not solicit current or prospective C12 members who live and work outside your own Territory via direct (e.g., face-to-face, telephone, direct mail, telemarketing, email) or indirect means (e.g., via third parties, other channels of distribution such as the Internet or mutual friends). Any solicited or unsolicited inquiries from outside your Territory will necessitate that the candidate be given the opportunity to attend any Business Forum meeting in their home Territory (i.e., their 'local' CEO Forum) as well as your Business Forum before selecting the specific Business Forum they would like to join. If contacted by such a prospect, you must inform them that there is another C12 Business Forum option and provide contact information for the applicable franchisee.
Source: Item 12 — TERRITORY (FDD pages 29–32)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee's exclusive territory is initially defined mutually by C12 Group and the franchisee, and it is incorporated into the business plan. This territory is geographically defined by cities, zip codes, counties, states, or the radius around the franchisee's home address. The size of the territory is also described in terms of Units, which are based on the estimated number of evangelical Christian chief executive officers and senior business managers employed by companies within the territory having at least 10 employees and at least $1 million in annual revenue.
C12 Group may revise a franchisee's territorial size and exclusivity if the franchisee has not started building a CEO Forum within the first 90 days after executing the Franchise Agreement, as demonstrated by specific duties such as making eight contacts per week, attending mandatory training sessions, launching a direct marketing campaign, having a plan for the first C12 introductory event, and reporting progress on business plan goals. Except for this specific instance, the definition of a franchisee's territory may not be changed without the written consent of both C12 Group and the franchisee.
However, C12 Group retains the unilateral right to redefine exclusive and non-exclusive territory definitions if a franchisee fails to meet minimum required levels of target market penetration, specifically 33% of the Baseline Target within 24 months and 50% within 36 months of becoming a franchisee, with at least one CEO Forum with at least ten CEO Members within two years of opening the business (should 33% of Baseline Target be less than ten CEOs). In such cases, C12 Group will endeavor to jointly discuss and plan such changes in advance. Franchisees can also request an expansion of their territory once they have achieved two full Business Forums, based on a proposed business plan that C12 Group must review and approve. Territory expansion will require a payment for each additional Unit of market potential, currently discounted for compliant franchisees seeking to expand at $20,000 per additional Unit.
These policies are important for prospective franchisees to understand, as they outline the conditions under which their exclusive territory could be altered or expanded, impacting their potential market and revenue. Franchisees should be aware of the performance metrics required to maintain their original territory and the costs associated with expanding it. Additionally, the initial definition of the territory and the factors used to determine its potential value (geographic size and the number of evangelical Christians in leadership positions) are critical for assessing the franchise opportunity.