What are the specific criteria used to determine whether a C12 Group franchisee is in compliance with the franchise agreement, considering their obligations outlined in Item 9?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
al C12 web functionality (e.g., search for other members, benchmarking, bulletin board/blog functions, etc.).
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- Specific Operational Obligations. Franchisee shall adhere to and comply with Franchisor's basic business model and its various standard processes, due dates, and payments, as they may be revised from time to time in Franchisor's sole discretion. Currently, these obligations of Franchisee include the
following:
- a. Franchisee shall submit a monthly Area Chair Activity and Payment Report via the reporting system to Franchisor by the fifth (5th) business day of each month for the preceding month's activity. Franchisee shall pay Franchisor a late fee of $100 each time this 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. Late fees and interest shall be paid in conjunction with Franchisee's payment of Royalty Fees. In addition, if Franchisee requires a change to a monthly Area Chair Activity and Payment Report (not due to Franchisor's system error) after the fifth (5th) day of the following month, Franchisee must pay Franchisor a $99 fee to correct such error(s).
- b. Franchisee shall pay Franchisor all fees due under this Agreement via ACH or check (or credit card with Franchisee paying the applicable transaction and processing fees), which must be received by Franchisor by the fifth (5th) day of the month.
- c. Franchisor reserves the right to modify the due dates and methods of payment for all payments due under this Agreement. Franchisor also reserves the right to have any of its staff, officers or Board Directors visit Franchisee's scheduled C12 meetings, given advanced notice, to support Franchisee in Franchisee's effortsto develop strong C12 forums, effectively apply C12 methods and processes, and to encourage Franchisee and Franchisee's members.
- d. Franchisee shall conduct member registration for CEO members and Key Players members by using standard C12 forms and registration payment remittance amounts and methods set forth herein (see fee schedule
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, several factors determine a franchisee's compliance with the franchise agreement. These include adherence to the franchisor's basic business model, standard processes, due dates, and payments, which may be revised periodically at C12 Group's discretion. Franchisees must submit a monthly Area Chair Activity and Payment Report by the fifth business day of each month. Late reports incur a $100 fee, and unpaid royalties past due by more than 30 days are subject to a 1.5% monthly compounded interest rate or the maximum allowed by law. Additionally, any changes required to the monthly report after the fifth day of the following month (not due to system error) will incur a $99 fee. Franchisees must also use standard C12 forms for member registration. Compliance with the Field Operations Manual includes Brand Standards, mandatory elements of the Meeting Playbook and One-on-One Playbook, and standard components of the C12 member experience. Franchisees must also consent to updates or changes in the C12 business model and Operations Manual by signing a Franchise Compliance Administrative Update letter each year. Breaches of the "above reproach" conduct, including moral turpitude, legal or illegal, are material grounds for immediate termination of the agreement.
C12 Group also monitors compliance through specific operational obligations. Franchisees must use C12 agendas, facilitation standards, materials, segments, forms, logos, websites, and formats, strictly following the C12 Brand Standards Guide. They must establish fixed meeting dates and locations and standard C12 service delivery approaches, such as monthly One-on-One meetings (Focus60) with members between the monthly CEO Forum meetings. Franchisees are expected to engage with members reliably, serving as facilitators rather than teachers or preachers. They are prohibited from reproducing the C12 trade name, logo, or copyrighted materials beyond permitted uses without prior written permission and must not solicit members to sell them other products or services. Maintaining current information on C12 Group's websites and providing members access to global C12 web functionality are also requirements.
These compliance measures are typical in franchising, as franchisors need to ensure brand consistency and adherence to standards across all franchise locations. The financial penalties for late or incorrect reporting are also standard practice, designed to encourage timely and accurate submissions. The "above reproach" conduct clause is specific to C12 Group's Christian-based business model, reflecting the brand's values and expectations for franchisee behavior. Prospective franchisees should carefully review all these obligations to ensure they can meet the franchisor's expectations and maintain compliance with the franchise agreement.