Does the C12 Group require approval for all sales and transfers of the Franchised Business or any interest in the Franchisee?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
chise system and Franchisor and the desire for service continuity to C12 members within Franchisee's Territory, Franchisor and Franchisee agree as follows:
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- Franchisor shall have the right to approve all sales and transfers of the Franchised Business or any interest in Franchisee if Franchisee is an entity. A transfer shall be deemed to occur when more than fifty percent (50%) of the equity ownership of Franchisee, as of the date this Franchise Agreement, is sold or transferred to a third-party. Such a sale or transfer will result in Franchisee and/or the transferee, as applicable, executing Franchisor's then-current form of franchise agreement, which may contain terms materially different than the Franchise Agreement. Franchisor may condition its consent to any transfer based on the evaluation of successor or transferee qualifications, business plan viability (including recognition of Franchise purchase terms), the transferee's successful completion of New Chair Training and payment of a $6,000 transfer fee. In addition, if the transferee acquiring the entire Franchised Business is not an existing C12 franchisee, they must pay Franchisor a training fee. The transfer is deemed approved only after the transferee has been deemed qualified to serve by Franchisor in its sole discretion, the transfer fee of $6,000 has been paid to Franchisor, all outstanding amounts owed by Franchisee to Franchisor have been paid in full, Franchisee (and its owners, if applicable) has executed a general re
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, C12 Group retains the right to approve all sales and transfers of the franchised business or any interest in the franchisee, particularly if the franchisee is an entity. A transfer is defined as occurring when more than 50% of the equity ownership of the franchisee changes hands from what it was on the date of the Franchise Agreement.
This means that if a franchisee wishes to sell their business or transfer a controlling interest in their franchise, they must obtain C12 Group's approval. The approval may be subject to certain conditions, including an evaluation of the successor's qualifications and the viability of their business plan. The potential transferee may also need to complete New Chair Training and pay a $6,000 transfer fee. If the transferee is not an existing C12 Group franchisee, they might also have to pay a training fee.
The transfer is only considered approved once the transferee is deemed qualified by C12 Group, the $6,000 transfer fee is paid, all outstanding debts to C12 Group are settled, a general release of C12 Group is executed by the franchisee, and a new franchise agreement is signed if more than 50% of the franchised business is being transferred. This level of control allows C12 Group to maintain consistency and standardization within its franchise system and ensure service continuity to its members.
This requirement ensures that any new owner or controlling party meets C12 Group's standards and is capable of maintaining the quality and reputation of the franchise. Prospective franchisees should be aware of these conditions and factor in the time and costs associated with the transfer approval process if they plan to sell or transfer their franchise in the future.