What is the C12 Group royalty fee based on?

According to the 2025 C12 Group Franchise Disclosure Document, the monthly royalty fee is based on the franchisee's membership roster and billings. This means that C12 Group franchisees will pay a percentage of their monthly revenue to the franchisor as a royalty. This fee is due regardless of whether the franchisee actually collects the registration and/or membership fees from its members.

This arrangement means that a C12 Group franchisee's financial obligation to the franchisor is directly tied to the success of their membership recruitment and billing. However, it also means that the franchisee is responsible for paying royalties even if members do not pay their fees. This could create a cash flow challenge for the franchisee if they have a significant number of members who are delinquent in their payments.

Franchisees must submit a monthly Area Chair Activity and Payment Report to C12 Group by the fifth business day of each month for the preceding month's activity. A late fee of $100 is charged each time the report is late. Any unpaid Royalty Fees past-due greater than thirty (30) days will be subject to a monthly compounded interest rate of 1.5% or the maximum interest rate allowed by law. In addition, if a franchisee requires a change to a monthly Area Chair Activity and Payment Report (not due to C12 Group's system error) after the fifth day of the following month, the franchisee must pay C12 Group a $99 fee to correct such error(s).

It is typical in the franchise industry for royalty fees to be based on a percentage of gross sales. This arrangement aligns the franchisor's success with the franchisee's, incentivizing the franchisor to provide support and resources to help the franchisee grow their business. Prospective franchisees should carefully consider the royalty fee structure and ensure they understand their obligations and the potential impact on their profitability.