What is the relationship between the monthly royalty fee and the C12 Group Marketing Co-op?

According to C12 Group's 2025 Franchise Disclosure Document, the monthly royalty fee percentage directly impacts the share of marketing expenses C12 Group will cover through its Marketing Co-op. C12 Group will pay a portion of C12 marketing expenses, including those related to the Prepaid Marketing Fund and other eligible expenses, at a rate equal to the franchisee's applicable monthly royalty fee percentage. This arrangement functions as a cooperative between the franchisee and C12 Group, and it is not a cooperative between individual C12 Group franchisees.

This means that a franchisee's royalty fee percentage determines the level of financial support they receive from C12 Group for approved marketing activities. These marketing activities and items are specifically approved and administered by C12 Group, including C12 Direct Mail Campaigns and C12 endorsed lead lists. To receive this support, franchisees must submit a C12 Marketing Co-op Request Form with the necessary documentation for C12 Group to review, approve, and process the payment.

For example, C12 Group may subsidize a portion of the cost of a franchisee's initial C12 Direct Mail Campaign, with the subsidy percentage (between 17.5% and 30%) being based on the franchisee's prevailing monthly royalty fee as a percentage of billings. The balance of the cost for this campaign would then be paid from the Prepaid Marketing Fund that is designated from the franchisee's Initial Franchise Fee. This system incentivizes higher performance and engagement, as a higher royalty percentage translates to greater marketing support from C12 Group.