Under what circumstances might the C12 Group franchisor present the franchisee with a consent letter?
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 C12 Group's 2025 Franchise Disclosure Document, the franchisor may present a franchisee with a consent letter if there are material updates or changes to the franchise agreement. This consent letter would incorporate the new terms and act to renew the agreement for another calendar year.
This clause is tied to the annual renewal process of the C12 Group franchise agreement. The initial term of the agreement extends through December 31st of the year following the agreement's execution. After that, the agreement is meant to be renewed each calendar year, provided both parties agree, the franchisee remains active, and the franchisee is in good standing. Good standing requires compliance with the agreement and acceptance of any updates to C12 Group's business model or Operations Manual.
The franchisor has sole discretion to make changes to the business model, based on their belief that the changes will strengthen the platform and enhance the franchise system's long-term value. The consent letter serves as a formal acknowledgment and acceptance of these changes by the franchisee, ensuring that both parties are aligned on the current terms of operation. C12 Group is also obligated to notify franchisees of material changes to Royalty Fees and minimum membership fees (which form the basis for calculating Royalty Fees) at least twelve months before the expiration of the current term.