What is the Training and Technology Fee for the C12 Group franchisee if they are an individual?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
counting principles generally accepted in the United States (GAAP). The financial statements were presented on a consolidated basis and all significant intercompany accounts and transactions eliminated.
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 $300-500. Franchise agreements are renewed annually with no additional charges.
When a franchise is sold, the Company agrees to provide certain services to the franchisee, including assisting with site selection, training, reference and promotional materials and assistance with local C12 events. Initial territory fees are recognized as revenue when substantially all initial services under the franchise agreement are completed. Continuing fees are recognized as earned.
The Company also has license agreements in certain international markets. The Company receives revenue based upon sales generated utilizing the intellectual property it provides and is recognized at that point in time.
Sales taxes billed are reported directly as a liability to the taxing authority.
Cash and Cash Equivalents: Cash and cash equivalents consist of demand deposits held by financial institutions as well as cash on hand.
Restricted Cash: Restricted Cash consists of prepaid funds for new territory marketing, cash accrued for the long-term incentive program, and unearned revenues from presale of tickets to the Company's bi-annual conference.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
Accounts Receivable: Accounts receivables are reported at outstanding principal. The Company does not have an allowance for credit losses at December 31, 2024 and 2023. The Company normally does not charge interest on accounts receivable.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group FDD, franchisees must pay a training and support fee. This fee ranges from $10,000 to $12,500 and is refundable if training has not yet started. This fee covers the C12 Group Area Chair Training Kit, which includes the training curriculum, business plan documents, reading and reference materials, and other C12 branded items.
Prospective C12 Group franchisees should note that this fee is separate from other initial fees, such as the $25,000 initial territory fee and the $10,000 prepaid marketing deposit. The training and support fee is a one-time cost, whereas franchisees also pay ongoing 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.
It is important to confirm with C12 Group whether the training and support fee covers all required training or if there are additional costs for ongoing training or materials. Also, franchisees should clarify the specific criteria for refund eligibility and the process for obtaining a refund if they decide not to proceed with the franchise before training begins. Associate Chairs only pay training and support fees.