Will the Healthsource Chiropractic Ad Fund be accounted for separately from other funds of HealthSource Chiropractic?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
The Ad Fund will be accounted for separately from other funds of HealthSource Chiropractic, and will not be used to defray any of our general operating expenses, except for any reasonable salaries, administrative costs, and overhead we may incur in activities reasonably related to the administration of the Ad Fund and its advertising programs (including without limitation conducting market research, preparing advertising and marketing materials, and collecting and accounting for contributions to the Ad Fund). We may spend in any fiscal year an amount greater or less than the total contributions to the Ad Fund in that year. We may cause the Ad Fund to borrow from us or other lenders to cover deficits of the Ad Fund, or to invest any surplus for future use by the Ad Fund. You authorize us to collect for remission to the Ad Fund any advertising monies or credits offered by any supplier to you based upon purchases you make. We will prepare an annual, unaudited statement of monies collected and costs incurred by the Ad Fund and will make it available to you on written request.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the Ad Fund will be accounted for separately from other funds of HealthSource Chiropractic. This means that the money collected for advertising purposes will be tracked and managed independently from the company's general operating funds. This separation is a common practice in franchising to ensure transparency and accountability in how advertising fees are used.
However, Healthsource Chiropractic may use the Ad Fund to cover reasonable salaries, administrative costs, and overhead related to administering the Ad Fund and its advertising programs. These activities include market research, preparing advertising and marketing materials, and managing the collection and accounting of Ad Fund contributions. This clause allows Healthsource Chiropractic to use the Ad Fund for the necessary expenses incurred in managing and executing advertising initiatives.
Healthsource Chiropractic retains the flexibility to spend more or less than the total contributions to the Ad Fund in any given fiscal year. They may also borrow funds or invest any surplus for future use by the Ad Fund. Additionally, Healthsource Chiropractic will provide an annual, unaudited statement of monies collected and costs incurred by the Ad Fund, which will be available to franchisees upon written request. This provides franchisees with some visibility into how the Ad Fund is being managed, although the statement is unaudited, meaning its accuracy has not been verified by an independent accountant.