According to the Healthsource Chiropractic agreement, how is the language of the agreement to be construed?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.17 Timing Is Important. Time is of the essence of this Agreement. ("Time is of the essence" is a legal term that emphasizes the strictness of time limits. In this case, it means it will be a material breach of this Agreement to fail to perform any obligation within the time required or permitted by this Agreement.)
- 17.18 Independent Provisions. The provisions of this Agreement are deemed to be severable. In other words, the parties agree that each provision of this Agreement will be construed as independent of any other provision of this Agreement.
- 17.19 Exercise of Discretion. Whenever this Agreement gives HealthSource Chiropractic discretion to take an action or make a decision, HealthSource Chiropractic will be allowed to take or make (or refrain from taking or making) that action or decision based on its business judgment. Even if HealthSource Chiropractic has numerous motives for a particular action or decision and/or there are other reasonable and/or arguably preferable alternatives to a particular action or decision, so long as at least one motive is a reasonable business justification, the action or decision will not be subject to challenge for abuse of discretion. IF THE EXERCISE OF HEALTHSOURCE CHIROPRACTIC'S DISCRETION AS TO ANY MATTER IS CHALLENGED, THE PARTIES EXPRESSLY DIRECT THE TRIER OF FACT THAT HEALTHSOURCE CHIROPRACTIC'S RELIANCE ON A BUSINESS REASON IN THE EXERCISE OF ITS DISCRETION IS TO BE VIEWED AS A REASONABLE AND PROPER EXERCISE OF HEALTHSOURCE CHIROPRACTIC'S DISCRETION, WITHOUT REGARD TO WHETHER OTHER REASONS FOR ITS DECISION MAY EXIST AND WITHOUT REGARD TO WHETHER THE TRIER OF FACT WOULD INDEPENDENTLY ACCORD THE SAME WEIGHT TO THE BUSINESS REASON.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, the agreement's provisions are designed to be severable, meaning each part is considered independent. This implies that if one provision is found invalid, the rest of the agreement remains in effect.
Additionally, the agreement emphasizes the importance of timing, stating that "time is of the essence." This means that any failure to meet deadlines specified in the agreement constitutes a material breach. This strict adherence to timelines can create pressure on the franchisee to perform obligations promptly to avoid potential default.
Furthermore, the agreement grants Healthsource Chiropractic discretion in making business decisions. As long as there is a reasonable business justification for their actions, their decisions will generally not be subject to challenge, even if other alternatives exist. This clause significantly limits a franchisee's ability to contest decisions made by Healthsource Chiropractic, provided the company can demonstrate a business rationale.