What is the C12 Group's policy on determining whether a franchisee has sufficiently demonstrated the ability to launch and successfully operate a C12 Franchised Business?
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 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee must achieve a minimum level of target market penetration to maintain exclusivity within their territory. C12 Group defines the franchisee's "Baseline Target" using publicly available data, including 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 franchisee's territory.
To maintain exclusivity within their territory, the franchisee must achieve the minimum performance levels outlined in Section IV.8.a of the franchise agreement. If a franchisee fails to meet these minimum performance levels, C12 Group has the right to take corrective actions. These actions may include reducing the size of the franchisee's territory, authorizing another franchisee to operate within the original franchisee's territory, or even operating a C12 Group business directly within the franchisee's territory.
This policy has significant implications for prospective franchisees. It emphasizes the importance of market penetration and achieving specific performance targets to maintain territorial exclusivity. Franchisees need to be aware of the data sources C12 Group uses to determine market potential and the performance levels they must meet. Failure to do so could result in a loss of territorial rights, increased competition within their territory, or even direct competition from C12 Group itself. This contrasts with some franchise systems that may not have explicit minimum performance standards tied to territorial exclusivity.