What was the status of The C12 Group's franchise registration in Maryland at the time of the alleged violations?
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 C12 Group sold a franchise in Maryland when it was not registered to offer and sell franchises in that state. This violation also included not depositing the initial fees paid by the franchisee into an escrow account, as required by a 2009 Escrow Order from the Maryland Securities Commissioner.
In response to inquiries from the Maryland Securities Division, the Commissioner concluded that The C12 Group violated registration, disclosure, and antifraud provisions of the Maryland Franchise Law. To resolve the matter, The C12 Group and the Commissioner entered into a consent order on May 15, 2012.
Under the consent order, The C12 Group agreed to immediately and permanently cease offering and selling franchises in Maryland until properly registered. The company also committed 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 violation of the law. The C12 Group neither admitted nor denied any violations as part of the agreement.