What are the potential consequences for a C12 Group franchisee who does not meet minimum performance standards?

According to C12 Group's 2025 Franchise Disclosure Document, franchisees must meet certain minimum performance standards to maintain their exclusive territory rights. C12 Group defines a franchisee's "Baseline Target" using data such as business census information and research on the percentage of practicing or evangelical Christians in the region, which helps establish the market potential for prospective member companies within the territory.

If a C12 Group franchisee fails to achieve the minimum performance levels, C12 Group has several options. The franchisor may reduce the size of the franchisee's territory, authorize another franchisee to operate within the original franchisee's territory, or even operate a C12 Group business directly within that territory. This clearly indicates that maintaining exclusivity is contingent upon meeting the franchisor's expectations for market penetration.

Furthermore, within 24 months of opening, a franchisee must achieve the greater of 33% of the Baseline Target or have at least one CEO Forum with at least 10 CEO Members. Within three years of opening, the franchisee must achieve 50% of the Baseline Target and have at least 10 CEO Members. If these performance levels are not met, the franchisee has 90 days to meet them or, if permitted by C12 Group, demonstrate substantial progress in good faith. Failure to meet these requirements within the 90-day period may result in C12 Group redefining the territory or terminating the Franchise Agreement altogether.

These stipulations highlight the importance of a franchisee's initial business plan and ongoing performance. Prospective franchisees should carefully consider the market potential of their territory and their ability to meet the specified targets within the given timeframes to avoid potential loss of territory or termination of the franchise agreement.