Is termination of the C12 Group franchise agreement automatic if a franchisee engages in poaching?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to not purposely solicit (either directly or indirectly) any prospective C12 member who lives and works in the territory of another C12 franchisee. Such 'poaching' is deemed by C12 to be a material breach of this Agreement that strikes at the unity of the C12 franchise system and is grounds for termination upon notice to Franchisee. If one of Franchisee's C12 members desires, for any reason, to consider becoming a member of a Business Forum in another C12 franchisee's territory and personally initiates a request to transfer their membership to another group, Franchisee shall enable the member to attend a full meeting in the other group (presuming room exists for their potential membership) before they reach a final decision. This C12 policy is aimed at serving the best
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, the franchise agreement is not automatically terminated if a franchisee engages in poaching. The FDD states that 'poaching' is considered a material breach of the agreement. Specifically, 'poaching' refers to a franchisee purposely soliciting prospective C12 members who live and work in another C12 franchisee's territory.
However, termination is not automatic. Instead, C12 Group must provide notice to the franchisee before terminating the agreement. This means that the franchisee will be informed of the breach and given an opportunity to address the issue, although the specific cure period is not detailed in this section.
It's important to note that if a C12 Group member initiates a request to transfer their membership to another group in a different franchisee's territory, the original franchisee must allow the member to attend a meeting in the other group before a final decision is made. In this scenario, neither franchisee receives compensation as a result of the member's transfer.