How does C12 Group use the Prepaid Marketing Fund Fee?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
other advertising cooperatives or councils in place.
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- Performing marketing and promotions in your Territory by spending the Prepaid Marketing Fund on initiatives that directly promote the formation of new C12 Business Forums in your Territory. Prepaid Marketing expenditures that qualify for payment include C12 Direct Mail
Campaigns related to C12 introductory events or meetings, procurement of qualifying lists of leads, local advertising, banners and other displays for exhibiting, event sponsorships, and emarketing. The use of the Prepaid Marketing Fund and percentage used for different approved expenditures vary for each individual practice and Chair. You are to follow the C12 Brand Standards Guide. Items which do not qualify include software related to contact or customer relationship management, regular subscriptions (e.g., Constant Contact), foodand beverage, catering, organizational membership dues, space rental for events or meetings, audio-visual equipment, and general supplies. Upon your submission of written requests with applicable documentation, C12 will reimburse you for your out-of-pocket expenditures on qualifying Prepaid Marketing Expenditures up to the limit of the balance available in the Prepaid Marketing Fund. C12 will make payments directly to vendors in the cases where C12 administers the marketing initiative on your behalf. You are not precluded from spending on non-qualifying marketing items or spending amounts greater than the $10,000 Prepaid Marketing Fund, but such costs will be borne solely by you. C12 will provide you with a periodic Prepaid Marketing Fund financial statement upon your request. C12 audits the Prepaid Marketing Fund account monthly. C12 uses the Prepaid Marketing Fund to solicit for new franchisees. For the purpose of promoting the formation of new C12 forums, C12 requires you spend the full prepaid marketing fund within 18 months of the execution of this agreement,
Source: Item 5 — INITIAL FEES (FDD pages 11–12)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the Prepaid Marketing Fund is used to promote the formation of new C12 Business Forums within a franchisee's territory. C12 Group spends the fund on marketing and promotional initiatives that directly support this goal. Qualifying expenditures include C12 Direct Mail Campaigns related to introductory events, lead list procurement, local advertising, banners and displays for exhibiting, event sponsorships, and e-marketing. The specific use and percentage allocated to different approved expenditures can vary for each individual practice and Chair, but all activities must adhere to C12 Group's Brand Standards Guide.
Certain items are not covered by the Prepaid Marketing Fund, such as software for contact or customer relationship management, regular subscriptions (e.g., Constant Contact), food and beverage, catering, organizational membership dues, space rental for events or meetings, audio-visual equipment, and general supplies. Franchisees can still spend money on these non-qualifying items or exceed the $10,000 Prepaid Marketing Fund, but they will bear the full cost themselves. C12 Group will reimburse franchisees for qualifying out-of-pocket expenses up to the fund's balance upon submission of written requests and documentation or make direct payments to vendors if C12 Group administers the marketing initiative.
C12 Group provides franchisees with periodic financial statements for the Prepaid Marketing Fund and audits the account monthly. The document states that C12 Group also uses the fund to solicit new franchisees. Franchisees are required to spend the entire Prepaid Marketing Fund within 18 months of signing the franchise agreement. Any unspent funds after this period will be forfeited to C12 Group. This requirement encourages franchisees to actively market and grow their C12 Business Forums within the initial period of operation.
In addition to the Prepaid Marketing Fund, C12 Group also has a C12 Marketing Co-op where they will pay a share of the franchisee's marketing expenses at a rate equal to the franchisee's applicable monthly Royalty Fee (17.5-30%). These expenses are specifically approved and administered by C12 Group, such as C12 Direct Mail Campaigns and franchisor-endorsed lead lists. The franchisee must submit a request form to C12 Group for these expenses, and upon approval, C12 Group will make the payment.