Does C12 Group have a right of first refusal to acquire a franchisee's business?

Question

Accepted Answer

| u. Dispute resolution by arbitration or mediation | XII, Exhibit F | All matters can be appealed up through C12’s defined three-step dispute resolution process which culminates in Christian arbitration pursuant to which the parties engage three Bible-believing Christian arbitrators as follows: one selected by the franchisee, one selected by C12, and one selected by such two arbitrators. The remedy recommended by the arbitration panel will be binding and final with no further recourse by either party. Subject to state law. |
|---|---|---|
| v. Choice of forum | XII, Exhibit F | Litigation must be conducted in Texas unless otherwise stated in Exhibit F for certain State Disclosures (subject to applicable state law). |
| w. Choice of Law | XII | Texas law will govern (subject to applicable state law). |
| C12 Franchisees |  |  |
| Total Revenue |  |  |
| January 1, 2024 to December 31, 2024 |  |  |
| Total Revenue | $44,250,036 | Reported by 65 franchisees. |
| m. Conditions for franchisor approval of transfer | X | New franchisee qualifies, transfer fee of \$6,000 paid, purchase agreement approved, training completed, all outstanding accounts receivable satisfied, release signed by you and current agreement signed by new franchisee (also see r. below). |
| n. Franchisor's right of | Not Applicable | C12 does not require right of first refusal, but must |
| first refusal to acquire |  | approve owner/operator and may, on occasion, take |
| franchisee's business |  | ownership if necessary. |
| o. Franchisor's option to purchase franchisee's business | X | If you ask C12 to purchase your business or you have not actively tended to the Territory for 60 days or more, C12 has the right to purchase or, in certain instances, regain the rights to the Territory at no cost. Subject to state law.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)

Does C12 Group have a right of first refusal to acquire a franchisee's business?

Answer from 2025 FDD Document

What This Means (2025 FDD)

u. Dispute resolution by arbitration or mediation	XII, Exhibit F	All matters can be appealed up through C12’s defined three-step dispute resolution process which culminates in Christian arbitration pursuant to which the parties engage three Bible-believing Christian arbitrators as follows: one selected by the franchisee, one selected by C12, and one selected by such two arbitrators. The remedy recommended by the arbitration panel will be binding and final with no further recourse by either party. Subject to state law.
v. Choice of forum	XII, Exhibit F	Litigation must be conducted in Texas unless otherwise stated in Exhibit F for certain State Disclosures (subject to applicable state law).
w. Choice of Law	XII	Texas law will govern (subject to applicable state law).
C12 Franchisees
Total Revenue
January 1, 2024 to December 31, 2024
Total Revenue	$44,250,036	Reported by 65 franchisees.
m. Conditions for franchisor approval of transfer	X	New franchisee qualifies, transfer fee of $6,000 paid, purchase agreement approved, training completed, all outstanding accounts receivable satisfied, release signed by you and current agreement signed by new franchisee (also see r. below).
n. Franchisor's right of	Not Applicable	C12 does not require right of first refusal, but must
first refusal to acquire		approve owner/operator and may, on occasion, take
franchisee's business		ownership if necessary.
o. Franchisor's option to purchase franchisee's business	X	If you ask C12 to purchase your business or you have not actively tended to the Territory for 60 days or more, C12 has the right to purchase or, in certain instances, regain the rights to the Territory at no cost. Subject to state law.