What steps must a C12 Group franchisee take if they elect not to renew the Franchise Agreement?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall ensure compliance with this by returning
these materials to Franchisor or, if Franchisor directs, destroying them.
II. Term and Renewal
The Term of this Agreement begins upon the execution hereof and continues through December 31st of the calendar year following the year in which this Agreement is executed. For example, if this Agreement is executed on May 31, 2024, the Term shall expire on December 31, 2025. Unless sooner terminated, as hereafter provided, the Term of this Agreement is meant to be renewed each calendar year for additional one-year Renewal Terms (with each Renewal Term being one calendar year) so long as (i) both Franchisor and Franchisee agree to such renewal, (ii) Franchisee remains active in operating the Franchised Business, and (iii) Franchisee is in good standing under this Agreement. Being in good standing requires Franchisee to remain in compliance with the terms of this Agreement and Franchisee's agreement to any updates or changes in Franchisor's business model and Operations Manual that have occurred during the prior year. Any changes made in Franchisor's business model will be made at Franchisor's sole discretion and based on Franchisor's belief that the changes will strengthen the overall platform and enhance the C12 Group franchise system's long-term value to both members and franchisees. There is no additional renewal fee associated with these annual renewals. If there are material updates or changes, Franchisor may present Franchisee with a consent letter incorporating such terms, which shall act to renew this Agreement for another calendar year. Franchisor shall notify Franchisee of material changes to Royalty Fees and minimum membership fees (as the basis for calculating Royalty Fees) at least twelve (12) months before the expiration of the Term or any Renewal Term.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
Based on the 2025 C12 Group Franchise Disclosure Document, a franchisee who chooses not to renew their Franchise Agreement is obligated to ensure compliance by returning specific materials to C12 Group or destroying them, if directed by C12 Group. The agreement's term typically begins upon execution and extends through December 31 of the following calendar year. For instance, an agreement executed on May 31, 2024, would expire on December 31, 2025.
Renewal of the agreement occurs annually, contingent upon mutual agreement between C12 Group and the franchisee, the franchisee's active operation of the franchised business, and the franchisee's good standing, which includes compliance with the agreement's terms and acceptance of any updates to C12 Group's business model and Operations Manual. C12 Group retains sole discretion over changes to its business model, aiming to strengthen the platform and enhance long-term value for both members and franchisees.
Notably, there are no additional renewal fees associated with these annual renewals. In the event of material updates or changes, C12 Group may present the franchisee with a consent letter incorporating such terms, effectively renewing the agreement for another calendar year. Furthermore, C12 Group is required to notify franchisees of material changes to Royalty Fees and minimum membership fees at least twelve months before the expiration of the current term.