What sections of the Franchise Agreement relate to the Principal Chair's obligations for a C12 Group franchise?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
GATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS**
The Principal Chair must be actively involved in the day-to-day operation of your franchise as a fullytrained Principal Chair (FA Sections IV, XVIII) and pursue effective stewardship in addressing the full market potential available in your assigned Territory as You serve local Christian business owners, CEOs, and presidents. Although it is possible to engage other qualified and fully-trained personnel in serving your Territory's demand as a part of your C12 practice (FA Sections I, IV, IX), you must remain active in the role of Principal Chair to retain the franchise. If the franchise is owned by an entity (e.g., a corporation, limited liability company, or partnership), then the franchise must be operated by someone who is an owner and officer of such an entity (a "Principal") and who has met all the on-going requirements of a fullytrained C12 Principal Chair (FA Sections X, XVIII). If circumstances should ever change such that such Principal is no longer both an owner and officer of such entity and such entity does not have a suitable replacement candidate for the role of C12 Principal Chair (contingent on C12's approval), then the franchise must be operated by the Principal Chair, or, failing that, transferred to C12 (at C12's option), an approved third-party (at C12's discretion), or terminated (FA Sections VIII, X).
C12 permits third party investors, silent equity positions, and non-operating ownership of a C12 franchise when all parties and agreements are reviewed and approved by C12. A non-operating ownership entity may designate a Principal Chair to operate the franchise and lead teams of Area Chairs as long as agreements and assignments are approved by C12 in writing. This includes the stipulation that C12 must approve and train all subsequent Area Chairs (whether designated as Principal Chairs by responsibility or not). The allowance is to both support capitalizing franchise launches as well as succession and liquidation of franchisees upon exit scenarios.
A non-operating ownership entity must comply with the moral and spiritual integrity standards associated with a Principal Chair within the community and not engage in any competing, conflict of interest, or predatory business interests.
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 C12 Group's 2025 Franchise Disclosure Document, Item 15 discusses the Principal Chair's obligations. The Principal Chair must be actively involved in the day-to-day operation of the franchise as a fully trained Principal Chair. They also need to pursue effective stewardship in addressing the full market potential in their assigned territory, serving local Christian business owners, CEOs, and presidents. While other qualified personnel can be engaged to help meet the territory's demand, the Principal Chair must remain active to retain the franchise.
If the franchise is owned by an entity, it must be operated by a Principal who is both an owner and officer of the entity and meets all ongoing requirements of a fully trained C12 Principal Chair. If the Principal no longer meets these requirements and the entity does not have a suitable replacement, the franchise must be operated by the Principal Chair, transferred to C12, an approved third party, or terminated. C12 Group permits third-party investors, silent equity positions, and non-operating ownership, provided all parties and agreements are reviewed and approved by C12 Group.
A non-operating ownership entity must comply with the moral and spiritual integrity standards associated with a Principal Chair and not engage in any competing, conflict of interest, or predatory business interests. Any non-operating ownership entity must still coordinate with and submit to C12 Group's ultimate approval of the selection, training, and installment of any Principal Chair for the franchise. Item 22, Section IX covers covenants during the term of the agreement, stating that the franchisee must agree not to own an interest or participate in any business viewed as competitive, injurious, or incompatible with C12 Group. The franchisee must also engage in the C12 Franchised Business as their primary vocation.