What is the relationship between the initial franchise fee for a C12 Group franchise in Item 5 and the potential for reimbursement described in Item 7?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
hise Fee of approximately $37,500.
For example, a metropolitan market with a defined territory possessing 1.3 Franchise Units worth of eligible customers would consist of a $32,500 Franchise Fee. On the other hand, a rural or less densely populated market representing 0.65 franchise units would consist of a $16,250 Franchise Fee. A territory of 0.92 units would still consist of a $25,000 Franchise Fee whereas a market with 0.47 units would consist of a $12,500 Franchise Fee ($12,500 being the minimum).
The Prepaid Marketing Fund for Territories with a larger number of Units (1.5 or greater) will be $10,000. Territory expansion will require a payment for each additional Unit of market potential (calculated as described here and in Item 7) according to C12's prevailing discounted Franchise Fee (i.e., currently $20,000 per Unit for expansions), with a minimum $2,500 paid to C12.
Other than as described above, all initial franchisees fees are non-refundable.
ITEM 6: OTHER FEES
| Gross Billings | Royalty Fee (% of Corresponding Gross Billings) |
|---|---|
| $0 - $13,000 | 30% |
| $13,001 - $26,000 | 27.5% |
| $26,001 - $40,000 | 25% |
| $40,001 - $60,000 | 22.5% |
| $60,001 - $80,000 | 20% |
| $80,001 + | 17.5% Eligible for Reimbursement |
| Print or Digital PR Campaign Targeted Direct Mail Campaign Email Nurturing Campaign Targeted Social Media Advertising Google Ad Campaign Radio or TV Advertising Spots Event Sponsorship with Speaking Opportunity | Sports Team or Mission Trip Sponsorship Event Hosting or Printing Costs Member, Vendor, or Prospect Gifts Marketing Collateral/Material Purchase Lead or Contact List without Campaign Software Subscriptions/Membership Fees Graphic Designer/Videographer Fee Consultant |
| Monthly Late Fees | Currently $100 per incident plus 1.5% interest on balances over 30 days, subject to usury maximums |
| C12 CURRENT Conference | Up to $1,000 to attend every two years |
| C12 Merchandise | Then-current prices |
| Optional C12 Seminars, Awards Banquets, and Introductory Events | No fee |
| Local C12 Co-op Marketing | Upon approval, for qualifying expenses, we subsidize a portion equal to your Monthly effective royalty fee. |
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the initial franchise fee, detailed in Item 5, is generally non-refundable, with one exception related to training fees as described in Item 22. However, Item 22 describes a potential 'money-back guarantee' that a C12 Group franchisee may offer to their new members. This guarantee states that if a member in good standing does not perceive value exceeding their accumulated fees after a full year, the franchisee will refund the member's monthly dues. If the franchisee offers this guarantee and maintains the necessary records, C12 Group will share the cost of reimbursing the member's monthly fees evenly with the franchisee. This is not a reimbursement of the initial franchise fee paid by the franchisee, but rather a sharing of the cost of refunding membership dues to dissatisfied members. Item 5 also mentions that territory expansion will require a payment for each additional unit of market potential, calculated as described in Items 5 and 7, according to C12's prevailing discounted Franchise Fee (currently $20,000 per Unit for expansions), with a minimum $2,500 paid to C12. This expansion fee is separate from the initial franchise fee and is also non-refundable. Item 22 also states that the initial franchise fees depend on the number of Territory Units granted to the franchisee.
In practical terms, this means a prospective C12 Group franchisee should understand that the initial franchise fee is typically non-refundable, except for the training fee. The 'money-back guarantee' is optional and, if offered, involves the franchisee refunding monthly dues to dissatisfied members, with C12 Group sharing the cost. This guarantee is not a direct reimbursement of the initial franchise fee paid by the franchisee. The initial franchise fee is determined by the size of the territory, measured in franchise units, with different fees applying to metropolitan versus rural markets. For example, a territory with 1.3 franchise units has a $32,500 franchise fee, while a territory with 0.65 franchise units has a $16,250 franchise fee.
This arrangement differs from some franchise systems where a portion of the initial franchise fee might be refundable under specific conditions or if certain milestones are not met. The C12 Group's approach places the onus on the franchisee to deliver value to their members and offers a mechanism for sharing the cost of refunds if the franchisee chooses to offer a money-back guarantee. A prospective franchisee should carefully consider the implications of offering such a guarantee and the potential financial impact on their business. They should also inquire about the specific criteria for determining a member's 'good standing' and the process for documenting and certifying a member's eligibility for a refund.
It is important for potential franchisees to note that the sharing of refund costs by C12 Group is contingent on the franchisee offering the money-back guarantee and maintaining accurate records. This highlights the importance of adhering to C12 Group's standards and procedures. The availability of this cost-sharing arrangement could be a significant benefit for franchisees who are confident in their ability to deliver value to their members but want to mitigate the risk of potential refunds. However, franchisees should also be prepared to cover their portion of the refund costs, which could impact their profitability, especially in the early stages of their business.
In summary, while the initial franchise fee for a C12 Group franchise is generally non-refundable, the potential for reimbursement is tied to an optional money-back guarantee offered to members, where C12 Group shares the cost of refunds with the franchisee. This is distinct from a refund of the initial franchise fee itself and is contingent on the franchisee's adherence to specific requirements and procedures. Prospective franchisees should carefully evaluate the terms of this guarantee and its potential impact on their business.