What specific provisions of the Maryland Franchise Law did the Maryland Securities Commissioner allege The C12 Group violated?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
In responding to inquiries from the Maryland Securities Division as a result of an investigation into the franchise related activities of The C12 Group, LLC ("C12"), the Maryland Securities Commissioner ("Commissioner") concluded that grounds exist to allege that C12 violated the registration, disclosure and antifraud provisions of the Maryland Franchise Law and an Escrow Order of the Commissioner, in relation to the offer and sale of a C12 franchise. C12 disclosed that it sold a franchise in Maryland during a time it was not registered to offer and sell franchises in Maryland and that it did not deposit any initial fees paid by the franchisee into escrow account as required pursuant to a 2009 Escrow Order of the Commissioner. On May 15, 2012, the Commissioner and C12 agreed to enter into a consent order whereby C12, without admitting or denying any violations of law, agreed to: immediately and permanently cease from the offer and sale of franchises in violation of the Maryland Franchise Law; promptly file and diligently pursue an application for franchise registration in Maryland; and offer rescission to the franchisee who was sold a franchise in Maryland in violation of the Maryland Franchise Law.
Source: Item 3 — LITIGATION (FDD page 11)
What This Means (2025 FDD)
According to the 2025 FDD, the Maryland Securities Commissioner alleged that The C12 Group violated specific provisions of the Maryland Franchise Law. The Commissioner concluded that there were grounds to allege that C12 Group violated the registration, disclosure, and antifraud provisions of the Maryland Franchise Law. The allegations also included violations of an Escrow Order of the Commissioner, specifically related to the offer and sale of a C12 Group franchise.
The FDD states that C12 Group disclosed that it sold a franchise in Maryland during a period when it was not registered to offer and sell franchises in that state. Additionally, C12 Group allegedly did not deposit the initial fees paid by the franchisee into an escrow account, as required by a 2009 Escrow Order issued by the Commissioner.
To resolve the matter, on May 15, 2012, The C12 Group and the Commissioner entered into a consent order. Under the terms of the order, C12 Group, without admitting or denying any violations, agreed to immediately and permanently cease offering and selling franchises in violation of the Maryland Franchise Law. The company also agreed to promptly file and diligently pursue an application for franchise registration in Maryland and to offer rescission to the franchisee who had been sold a franchise in Maryland in violation of the Maryland Franchise Law.