Under what conditions does C12 Group have the option to purchase a franchisee's business?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
and not an individual, the Franchised Business must be under the daily supervision of someone who is an owner and, if applicable, an officer of the
Franchisee who meets all of Franchisor's ongoing training requirements (a "C12 Area Chair"). If circumstances should ever change, and such person is no longer both an owner and officer of Franchisee and Franchisee does not have a suitable replacement candidate for the role of C12 Area Chair (contingent on Franchisor's approval), then Franchisor may, in its sole discretion, terminate this Agreement or allow the Franchised Business to be transferred or sold to an approved third-party. All owners with a five percent (5%) or greater beneficial interest in Franchisee must, as a condition precedent to the effectiveness of this Agreement, agree to honor the terms of this Agreement in their individual capacities by executing the Owners Guaranty attached hereto as Attachment A.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 36–40)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for C12 Group does not explicitly state conditions under which C12 Group has the option to purchase a franchisee's business. However, it does outline circumstances where C12 Group may terminate the franchise agreement or impact the franchisee's territory.
Specifically, if a franchisee fails to meet minimum performance standards, C12 Group has the right to reduce the size of the franchisee's territory, authorize another franchisee to operate within the original franchisee's territory, or operate a C12 Group business within that territory themselves. Additionally, if the designated C12 Area Chair (who must be an owner and officer of the franchisee) leaves their position and the franchisee does not have a suitable replacement, C12 Group may terminate the agreement or allow the business to be transferred or sold to an approved third party.
While the FDD does not detail a direct purchase option, these clauses suggest scenarios where C12 Group could exert significant control over the franchise's operation or its future. A prospective franchisee should seek clarification from C12 Group regarding their specific rights and options in such situations, including any potential for C12 Group to purchase the business or its assets.