factual

What sections of the Franchise Agreement relate to the transfer or termination of a C12 Group franchise?

C12_Group Franchise · 2025 FDD

Answer from 2025 FDD Document

r 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. | | p. Death or disability of franchisee | X | Franchise must be assigned by estate to a C12- approved buyer within six months of your involuntary physical departure from the practice to qualify as a transfer. | | q. Non-competition covenants during the term of the franchise | I, IV, IX | No involvement in a business of competing or contrary purpose while a franchisee. Subject to state law. | | r. Non-competition covenants after the franchise is terminated or expires | I, IV, VIII, XV | For two (2) years after the termination of the Franchise Agreement for any reason, Franchisee shall not directly or indirectly own an interest in or otherwise be employed by or engaged with a Competitive Business within the Territory, within ten (10) miles of the Territory, within the territory of any other C12 franchise, or within ten (10) miles of the territory of any other C12 franchise, subject to state law. For purposes of this Section, a "Competitive Business" is any business that offers peer mentorship and coaching to Christian business leaders. The post termination non-competition obligations under this Section shall not apply if Franchisee pays Franchisor the Exit Fee described above. The Exit Fee is equal to the average Royalty owed to C12 over the three (3) months preceding termination multiplied by twelve (12). Subject to state law. | | s. Modification of agreement | XV, XVI | No modifications generally, and specifically not unless both parties agree in writing, but C12 Chair Training Manual subject to change and updating by C12. | | t. Integration/merger clause | XV | Only the terms of the Franchise Agreement and other related written agreements are binding (subject to applicable state law). No other representations or promises will be binding. Nothing in the Franchise Agreement or any other related written agreement is intended to disclaim representations made in the Franchise Disclosure Document. | | u. Dispute resolution by | XII, Exhibit F | All matters can be appealed up through C12's | |--------------------------|----------------|------------------------------------------------------------| | arbitration or mediation | | 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). |

ITEM 18: PUBLIC FIGURES

C12 does not currently use any public figures to promote itsfranchises.

ITEM 19: FINANCIAL PERFORMANCE REPRESENTATIONS

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets if there is a reasonable basis for the information and if the information is included in the disclosure document. Financial performance information that differs from that included in Item 19 may be given only if: (1) the franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in Item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

There were sixty-seven (67) C12 Forum businesses open and operating as of December 31, 2024, all of which were operated by C12 franchisees. During the 2024 calendar year, two (2) franchisees opened for business during the year. These two (2) franchisees have been excluded from the data below. The data below is a historical financial performance representation, reflecting the Total Revenue earned by the remaining sixty-five (65) C12 franchisees that were open and operational from January 1, 2024 to December 31, 2024. There are no material financial or operational differences between these franchisees and the franchise offered under this disclosure document except that, as disclosed in Item 6, some early franchisees are "grandfathered in" at lower Royalty Fee percentages, but the different Royalty Fee percentages do not affect the Total Revenue earned by those franchisees.

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, several sections of the Franchise Agreement address transfer and termination. Item 17 provides a table outlining various conditions and related sections. Specifically, Section X pertains to conditions for franchisor approval of a transfer, franchisor's option to purchase the franchisee's business, and what happens in the event of the death or disability of the franchisee. Section X also addresses the franchisor's right of first refusal to acquire the franchise. Sections I, IV, IX relate to non-competition covenants during the term of the franchise, while Sections I, IV, VIII, and XV concern non-competition covenants after the franchise is terminated or expires. Sections XV and XVI address modification of the agreement.

Regarding dispute resolution, choice of forum, and choice of law, Section XII and Exhibit F are relevant. The document also mentions that Section XV covers the integration/merger clause.

Additionally, Section X details the transfer, sale, or assignment conditions, noting that a transfer is deemed to occur when more than 50% of the equity ownership is sold or transferred. The franchisor has the right to approve all sales and transfers and may require the execution of the current form of the franchise agreement, which may contain materially different terms. The franchisor may also condition its consent based on the evaluation of the successor's qualifications, business plan viability, completion of New Chair Training, and payment of a $6,000 transfer fee. Furthermore, if the transferee is not an existing C12 Group franchisee, they must pay a training fee.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.