Are there any additional fees associated with the annual renewal of a C12 Group franchise agreement?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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, there are no additional fees associated with the annual renewal of the franchise agreement. The agreement is designed to be renewed each calendar year, provided that both C12 Group and the franchisee agree to the renewal, the franchisee is actively operating the franchised business, and the franchisee is in good standing, which includes compliance with the agreement's terms and any updates to C12 Group's business model or Operations Manual.
C12 Group retains the discretion to make changes to its business model, believing that such changes will strengthen the platform and enhance the franchise system's long-term value. Franchisees will be notified of any material changes to royalty fees and minimum membership fees at least 12 months before the expiration of the current term. If there are material updates or changes, C12 Group may present the franchisee with a consent letter incorporating these terms, which, upon signing, renews the agreement for another calendar year.
This arrangement provides clarity and predictability for franchisees regarding renewal costs, as there are no hidden or additional fees beyond the initial investment and ongoing royalty and other operational fees. However, franchisees should remain aware of potential changes to the business model and operational requirements, as these could impact their ability to meet the 'good standing' criteria necessary for renewal. Staying informed about these changes and maintaining compliance is crucial for ensuring the smooth annual renewal of the C12 Group franchise agreement.