Under what conditions is a transfer deemed to occur for a C12 Group franchise?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Franchisor shall have the right to approve all sales and transfers of the Franchised Business or any interest in Franchisee if Franchisee is an entity. A transfer shall be deemed to occur when more than fifty percent (50%) of the equity ownership of Franchisee, as of the date this Franchise Agreement, is sold or transferred to a third-party. Such a sale or transfer will result in Franchisee and/or the transferee, as applicable, executing Franchisor's then-current form of franchise agreement, which may contain terms materially different than the Franchise Agreement. Franchisor may condition its consent to any transfer based on the evaluation of successor or transferee qualifications, business plan viability (including recognition of Franchise purchase terms), the transferee's successful completion of New Chair Training and payment of a $6,000 transfer fee. In addition, if the transferee acquiring the entire Franchised Business is not an existing C12 franchisee, they must pay Franchisor a training fee. The transfer is deemed approved only after the transferee has been deemed qualified to serve by Franchisor in its sole discretion, the transfer fee of $6,000 has been paid to Franchisor, all outstanding amounts owed by Franchisee to Franchisor have been paid in full, Franchisee (and its owners, if applicable) has executed a general re
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, a transfer of a franchise is deemed to occur when more than fifty percent (50%) of the equity ownership of the franchisee, as it stands on the date of the Franchise Agreement, is sold or transferred to a third party. This definition is crucial because such a transfer necessitates the execution of C12 Group's current franchise agreement by both the franchisee and/or the transferee. The new agreement may contain terms that are significantly different from the original agreement.
C12 Group maintains the right to approve all sales and transfers of the franchised business or any interest in the franchisee, especially if the franchisee is an entity. This provision allows C12 Group to ensure that any new owners or stakeholders meet their standards and are aligned with the brand's values and operational practices. The franchisor evaluates the qualifications of the successor or transferee, the viability of their business plan (including recognition of franchise purchase terms), and their successful completion of New Chair Training. A transfer fee of $6,000 is also required.
Furthermore, if the transferee acquiring the entire C12 Group franchised business is not an existing franchisee, they must pay a training fee to C12 Group. The transfer is only considered fully approved after the transferee is deemed qualified by C12 Group, the $6,000 transfer fee is paid, all outstanding amounts owed by the franchisee to C12 Group are paid in full, the franchisee executes a general release of C12 Group, and a new franchise agreement is signed if more than fifty percent (50%) of the franchised business is transferred. This comprehensive process ensures that any transfer maintains the integrity and standards of the C12 Group franchise system.