Is there a cause required for a C12 Group franchisee to terminate the agreement after receiving feedback at the Semi-Annual Chair Training?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
- Termination by Franchisee. Franchisee may terminate this Agreement by ninety (90) days' written notice to Franchisor subject to the process described below. In keeping with the principles of transparency and walking mutually "in the light" of Scripture together that has led Franchisor and Franchisee to enter into this Agreement, prior to giving Franchisor written notice of termination, Franchisee must attend the next available Semi-Annual Chair Training and communicate Franchisee's reasons for termination to the other franchisees and Area Chairs in attendance. After receiving feedback from other franchisees and Area Chairs, Franchisee may thereafter terminate this Agreement without cause. If Franchisee terminates this
Agreement due to no fault of Franchisor and Franchisee engages in or intends to engage in a competitive business serving the same customers who were otherwise engaged as members in Franchisee's C12 Franchised Business, Franchisee shall pay Franchisor an exit fee equal to (a) the average Royalty Fees paid to Franchisor over the three (3) months preceding Franchisee's notice of termination (b) multiplied by twelve (12) ("Exit Fee").
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a franchisee can terminate the agreement without cause after attending the Semi-Annual Chair Training and receiving feedback from other franchisees and Area Chairs. Prior to providing written notice of termination, the franchisee must attend the next available Semi-Annual Chair Training and communicate the reasons for termination to the other franchisees and Area Chairs in attendance.
After receiving feedback, the franchisee can proceed with termination without needing a specific cause. However, if the franchisee terminates the agreement due to no fault of C12 Group and then engages in a competitive business serving the same customers who were members of the franchisee's C12 Group franchise, the franchisee must pay C12 Group an exit fee.
The exit fee is calculated by multiplying the average Royalty Fees paid to C12 Group over the three months preceding the termination notice by twelve. This condition is in place to ensure that franchisees do not unfairly compete with C12 Group after terminating their franchise agreement, especially if they are leveraging the knowledge and relationships gained during their time as a franchisee.