Does the text provide a summary of the key terms of the C12 Group contracts?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
Revenue Recognition: A majority of the Company's revenues are derived from franchise fees. Franchise agreements generally require the franchisee to pay 1) an initial non-refundable territory fee of $25,000 per franchise unit, 2) a prepaid marketing deposit of $10,000, 3) a training and support fee of $10,000 to $12,500, which is refundable prior to the start of training, 4) continuing fees based upon a percentage of monthly member billings ranging from 12% to 30%, and 5) a new member registration fee ranging from $250 to $425, which increased to $300 to $500 in July 2023. Franchise agreements are renewed annually with no additional charges.
...
-
- Territorial Restrictions. Franchisee will have the exclusive right to establish a C12 Group business within the Territory and to market C12 Group services, programs, and materials within the Territory.
Franchisee shall not host C12 Group meetings outside of the Territory. Franchisee may provide C12 Group services to members who live or work outside of the Territory but desire to participate in C12 Group meetings within the Territory. Similarly, individuals living within the Territory may engage with C12 Group businesses operated by other franchisees or Franchisor and its affiliates. Franchisee must reside within the Territory unless Franchisor approves otherwise in writing. Franchisee may only establish additional territories with Franchisor's written permission and by meeting Franchisor's then-current requirements for operating a C12 Group business within multiple territories. Franchisee shall not solicit current or prospective members who live and work outside of the Territory. If Franchisee is contacted by any prospective members who live and work outside of the Territory, Franchisee must inform such prospective members that there is another C12 Group business forum option (if applicable) and provide such prospective members with contact information of the C12 franchisee whose Territory the prospective members live and work within.
...
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)
According to the 2025 C12 Group Franchise Disclosure Document, the franchise agreement requires franchisees to pay several fees. These include an initial non-refundable territory fee of $25,000 per franchise unit, a prepaid marketing deposit of $10,000, and a training and support fee ranging from $10,000 to $12,500, which is refundable before training starts. Additionally, franchisees must pay continuing fees based on a percentage of monthly member billings, ranging from 12% to 30%, and a new member registration fee ranging from $300 to $500, which increased from $250-$425 in July 2023. The franchise agreements are renewed annually without any additional charges.
The C12 Group franchise agreement outlines the terms and conditions under which the franchisor grants the franchisee the right to operate a C12 Group business within a specific territory. Franchisees are granted the exclusive right to establish a C12 Group business and market its services within their designated territory. However, franchisees are restricted from hosting C12 Group meetings outside of their territory. They must also reside within their territory unless the franchisor provides written approval otherwise.
The agreement also addresses the term and renewal conditions. The initial term begins upon execution of the agreement and extends through December 31st of the following calendar year. The agreement is meant to be renewed each calendar year for additional one-year terms, provided that both the C12 Group and the franchisee agree to the renewal, the franchisee remains active in operating the franchised business, and the franchisee is in good standing, complying with the agreement's terms and any updates to the franchisor's business model and operations manual. The C12 Group must notify franchisees of material changes to royalty fees and minimum membership fees at least twelve months before the expiration of the term or any renewal term.