What is the C12 Group's responsibility regarding the determination of a franchisee's ability to operate the franchised business?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
s Franchisor determines to be broadly beneficial for Franchisee, Franchisee's C12 members, and the C12 franchise system.
IV. Franchisee's Duties
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- General Operation of the Franchised Business. Upon completing New Chair Training and being approved by Franchisor to open for business, Franchisee agrees to perform the following in regard to each area of the C12 business for as long as this Agreement is in effect in order to (i) facilitate consistency among C12 franchisees, (ii) provide reliable quality and member value based on proven C12 methods and materials, (iii) promote consistency in advertising, marketing and brand building efforts, and (iv) to remain an integral part of the community of C12 leaders devoted to working together to continually enhance the Franchisor's standardized offering for Franchisor and Franchisee's mutual benefit and the benefit of all those in the C12 network of peer Christian business leaders globally:
- a. Full-Time Vocation. Franchisee shall operate the Franchised Business on a full-time basis, dedicating Franchisee's full time and attention to the operation thereof. Franchisee must not have any competing commercial interests.
- b. Entity Ownership. If Franchisee is an entity and not an individual, the Franchised Business must be under the daily supervision of someone who is an owner and, if applicable, an officer of the
Franchisee who meets all of Franchisor's ongoing training requirements (a "C12 Area Chair"). If circumstances should ever change, and such person is no longer both an owner and officer of Franchisee and Franchisee does not have a suitable replacement candidate for the role of C12 Area Chair (contingent on Franchisor's approval), then Franchisor may, in its sole discretion, terminate this Agreement or allow the Franchised Business to be transferred or sold to an approved third-party. All owners with a five percent (5%) or greater beneficial interest in Franchisee must, as a condition precedent to the effectiveness of this Agreement, agree to honor the terms of this Agreement in their individual capacities by executing the Owners Guaranty attached hereto as Attachment A. Such individuals' liability under this Agreement shall be joint and several.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 FDD, the C12 Group requires that franchisees complete New Chair Training and be approved by the C12 Group to open for business. Franchisees must operate the franchised business on a full-time basis, dedicating their full time and attention to the operation. Franchisees cannot have any competing commercial interests. If the franchisee is an entity, the franchised business must be under the daily supervision of an owner and, if applicable, an officer of the entity.
The C12 Group also sets minimum performance standards for franchisees to maintain exclusivity within their territory. The C12 Group defines a franchisee's "Baseline Target" using publicly available data, including business census data and research data on the percentage of 'practicing Christians' or 'evangelical Christians' by region. This data helps establish the market potential in terms of prospective member companies within the territory.
To maintain exclusivity, a franchisee must achieve the minimum performance levels. If a franchisee fails to meet these levels, the C12 Group may reduce the size of the franchisee's territory, authorize another franchisee to operate within the original franchisee's territory, or operate a C12 Group business within the territory itself. This ensures that each territory is effectively developed and that the C12 Group's standards are upheld.