C12 GROUP Christian Franchise Smited with Consent Order
C12 Group franchise owners preach that business owners must hold themselves accountable for their decisions and their actions.
The C12 Group franchise website states “how we conduct business defines much of who we are.”
So if Christian businesses have the C12 Group to urge accountability upon them, who holds the C12 Group accountable?
Well, the State of Maryland, for one.
Are you familiar with the C12 Group franchise opportunity? Please share a comment below.
C12 Group Violated Franchise Laws
C12 offers and sells franchises for executive development programs directed to and for Christian business owners and their staff.
The State of Maryland has charged C12 Group with selling franchises illegally, with violating Maryland Franchise Law and multiple Maryland Franchise Regulations (COMAR) and for disobeying the Maryland Commissioner’s 2009 Escrow Order.
The Maryland Attorney General has issued a consent order demanding that C12 Group cease violations of Maryland franchise law and offer a full offer to rescind the franchise agreement to the franchisee who was sold the illegal, unregistered franchise.
Read the consent order against C12 Group and CEO Donald Barefoot here:
SECURITIES COMMISSIONER OF MARYLAND The C12 Group, LLC Consent Order
C12 Group: Innocent Error or Serious Red Flags?
While some franchisors try to pass off lapsed registrations as innocent administrative errors (The Sin of Sloth), there are several red flags contained in this consent order.
The Sin of Pride?
The first is what appears to be C12 Groups flagrant disregard for franchise laws and disrespect for the agency charged with protecting Maryland consumers. When C12 Group had submitted an earlier franchise renewal to Maryland, the Maryland Securities Division responded with a letter “outlining deficiencies that C12 had to correct in order to renew its franchise offering in Maryland.”
C12 Group did not respond nor did they correct these deficiencies and apparently proceeded with marketing and selling franchises in Maryland without the legal right to do so.
The Sin of Greed?
In connection with that renewal application, on January 21, 2009 the Commissioner signed an Escrow Order (“2009 Escrow Order”) requiring “C12 to deposit all initial fees, within 48 hours of the receipt of these funds, in an escrow account approved by the Commissioner until such time as the Commissioner takes further action.”
C12 Group was obviously aware of this Escrow Order as it appeared in the unregistered Franchise Disclosure Document it used to sell its franchise in Maryland. However, C12 collected total initial franchise fees of $25,000.00 via checks and credit card. C12 admits that it did not deposit the fees into the Maryland escrow account as required by the 2009 Escrow Order.
The Sin of Deceit?
One of the most troubling questions of C12’s transgressions is whether C12 is using deceptive or illegal earnings claims (now called Financial Performance Representations) to sell franchises. The unregistered and unapproved FDD C12 used to sell its Maryland franchise did not comply with the requirements of Maryland Franchise Law. According to the Consent Order, “the Financial Performance Representation, in the form of a projection, that C12 included in each FDD did not have a reasonable basis and did not otherwise comply with the requirements under the Maryland Franchise Law for making a Financial Performance Representation.”
When we checked the MN database of FDDs, C12’s franchise registration application has been withdrawn. Could it be that C12 did not register its FDD with Maryland because it knew it was using deceptive or defective earnings projections to close franchise sales?
We Invite C12 Franchisees, Executives, Employees & Clients to Share Below.
Is C12 Group a respectable, Christian franchise organization that simply made an honest mistake?
Or is C12 Group a company simply interested in selling franchises and collecting fees, and is willing to use deceptive earnings projections and flout franchise laws to do so?
UnhappyFranchisee.com is a franchise discussion site that invites franchisees, executives, employees and their clients to share their insights, experiences and views using their own names or anonymously.
Our goal is to help prospective franchise owners and others make informed franchise decisions.
ARE YOU FAMILIAR WITH THE C12 GROUP FRANCHISE OPPORTUNITY? OR C12 CHRISTIAN BUSINESS SERVICES? SHARE A COMMENT BELOW.
I have been a member since 2009 and find the organization to be an excellent resource, operating with strong integrity for multiple decades in our area. I have a good relationship with the franchise owner in this territory and his good reputation proceeds him, for over 30 years now.
I was in C12 in California for two years. It was the best two years my business has had. I have been out now for 3 years but I am going to re-sign. Having godly counsel is important for Christians.
This report is hard to believe based upon my experience with C12 and the founder.
As someone who has direct knowledge of C12 in 2020, it is a marketing scheme designed to lure easily manipulated business owners to feel like they receive an exclusive invitation to this member’s only group. They take others ideas, put the Christian label on them and market them as their own. They charge each member $650/month to be a member. Can’t attend a mandatory monthly meeting? You still have to pay. Want to leave? You have to appear before a 3 member panel to explain why (it’s in the contract.) HEAVY pressure is placed upon staff to join the Key Persons group where it practically becomes a job requirement.
Want to be held accountable and get Godly counsel? You can do that for free at a MULTITUDE of webpages, YouTube channels and (here is a novelty idea) your OWN CHURCH.
C12 preys on those who feel inferior much like the club you were asked to join in high school that was “exclusive” to make you feel important while shelling out thousands in fees that could go to charity.
As a Board Member and Executive of a small Corporation I witnessed, first hand C12 take advantage of a recently widowed women who inherited her Husband’s business. They offered all sorts of advise on subjects and trade channels they had no experience operating in. They will tell owners to ignore internal experts and espouse unqualified and inexperienced advise. By following her C12 “Mentor’s” counsel she reversed the corporations annual sales growth rate of +17% (an all time record year) down into a negative growth rate, the next year. This is a dangerous organization that, as the other poster mentioned, prays on vulnerable inexperienced Christians in business who are desperately seeking help. I would run from them!