Under what conditions are C12 Group franchise agreements renewed annually?
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 franchise agreement has an initial term that extends through December 31st of the year following the agreement's execution. For instance, an agreement executed on May 31, 2024, would expire on December 31, 2025. After the initial term, the agreement is intended to be renewed each calendar year for additional one-year terms.
However, these annual renewals are contingent upon specific conditions. First, both C12 Group and the franchisee must agree to the renewal. Second, the franchisee must remain actively involved in operating the franchised business. Finally, the franchisee must be in good standing under the agreement, which requires compliance with the agreement's terms and acceptance of any updates or changes to C12 Group's business model and Operations Manual implemented during the previous year.
The FDD specifies that C12 Group has the sole discretion to make changes to its business model, based on their 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, C12 Group may present the franchisee with a consent letter incorporating such terms, which shall act to renew this Agreement for another calendar year. C12 Group will notify franchisees 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.