What is the requirement for a C12 Group franchisee to retain the franchise?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
ll ensure compliance with this by returning
these materials to Franchisor or, if Franchisor directs, destroying them.
II. Term and Renewal
The Term of this Agreement begins upon the execution hereof and continues through December 31st of the calendar year following the year in which this Agreement is executed. For example, if this Agreement is executed on May 31, 2024, the Term shall expire on December 31, 2025. Unless sooner terminated, as hereafter provided, the Term of this Agreement is meant to be renewed each calendar year for additional one-year Renewal Terms (with each Renewal Term being one calendar year) so long as (i) both Franchisor and Franchisee agree to such renewal, (ii) Franchisee remains active in operating the Franchised Business, and (iii) Franchisee is in good standing under this Agreement. Being in good standing requires Franchisee to remain in compliance with the terms of this Agreement and Franchisee's agreement to any updates or changes in Franchisor's business model and Operations Manual that have occurred during the prior year. Any changes made in Franchisor's business model will be made at Franchisor's sole discretion and based on Franchisor's belief that the changes will strengthen the overall platform and enhance the C12 Group franchise system's long-term value to both members and franchisees. There is no additional renewal fee associated with these annual renewals. If there are material updates or changes, Franchisor may present Franchisee with a consent letter incorporating such terms, which shall act to renew this Agreement for another calendar year. Franchisor shall notify Franchisee of material changes to Royalty Fees and minimum membership fees (as the basis for calculating Royalty Fees) at least twelve (12) months before the expiration of the Term or any Renewal Term.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 35–36)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, several factors determine whether a franchisee can retain their franchise. The agreement lasts through December 31st of the year following its execution and is meant to be renewed each calendar year for additional one-year terms.
To maintain the franchise, both C12 Group and the franchisee must agree to the renewal. The franchisee must remain active in operating the franchised business and be in good standing, which means complying with the terms of the agreement and any updates to C12 Group's business model and Operations Manual. C12 Group has the sole discretion to make changes to its business model to strengthen the platform and enhance the franchise system's long-term value.
Additionally, the franchisee must achieve a minimum level of target market penetration to maintain exclusivity within their territory. Failure to meet these minimum performance levels could result in C12 Group reducing the size of the franchisee's territory, authorizing another franchisee to operate within the territory, or operating a C12 Group business within the franchisee's territory. Franchisees must also meet ongoing training requirements to be considered a "C12 Area Chair." If the person in this role is no longer an owner and officer of the franchisee, and a suitable replacement cannot be found and approved, C12 Group may terminate the agreement or allow the business to be transferred or sold to a third party.