Does C12 Group have the right to evaluate a franchisee's financial ability?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
employees that work for the Area Chairs' C12 businesses. C12 will engage you in a seven-step selection process including, but not limited to: initial inquiries, conversations and evaluations, application submittal and review, visitation of an existing C12 meeting, assessments (for example, on-line Leading Dimensions Profile), and due diligence (reference checks, credit check, criminal background check), exchange of disclosure documents and draft agreements, in-person meeting(s) with C12 leader(s), Board interviews, and final evaluation and examination prior to the New Chair Training.
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- Granting you a franchise to operate as a C12 franchisee within a designated Territory upon the payment of the Initial Franchise Fee (FA Sections III, IV, and V).
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Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 21–29)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, C12 Group has the right to evaluate a prospective franchisee's financial ability. As part of the seven-step selection process, C12 Group conducts due diligence, including reference checks, credit checks, and criminal background checks.
The FDD states that C12 Group has the unilateral right to evaluate a franchisee's personal abilities, aptitude, calling, fit, and financial ability to qualify as a C12 Group franchisee. This evaluation is part of determining whether a potential franchisee is a good fit for the C12 Group system.
This evaluation occurs prior to the New Chair Training. While it is rare for an incoming franchisee to fail to complete training to C12 Group's satisfaction, C12 Group reserves the right to make this determination and establish a remediation plan with the franchisee.
This comprehensive evaluation process is typical for franchise systems, as the success of individual franchisees reflects on the overall brand. C12 Group's thoroughness suggests they are highly selective in awarding franchises.