In the Healthsource Chiropractic agreement, what is the franchisee agreeing to regarding unenforceable restrictive covenants?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
17. ENFORCEMENT.
17.1 Invalid Provisions; Substitution of Valid Provisions.
- a. To the extent that any of the non-competition, non-solicitation, or other restrictive covenants of this Agreement are deemed unenforceable because of their scope in terms of area, business activity prohibited, length of time, or other terms, you agree that the invalid provision will be deemed modified or limited to the extent or manner necessary to make that particular provision valid and enforceable to the greatest extent possible in light of the intent of the parties expressed in such provision under the laws applied in the forum in that we are seeking to enforce such provision.
- b. If any lawful requirement or court order of any jurisdiction (1) requires a greater advance notice of the termination or non-renewal of this Agreement than is required under this Agreement, or the taking of some other action which is not required by this Agreement, or (2) makes any provision of this Agreement or any specification, program, standard, or operating procedure we prescribed invalid or unenforceable, then the advance notice and/or other action required or revision of the specification, program, standard, or operating procedure will be substituted for the comparable provisions of this Agreement in order to make the modified
provisions enforceable to the greatest extent possible. You agree to be bound by the modification to the greatest extent lawfully permitted.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, the franchisee agrees that if any of the non-competition, non-solicitation, or other restrictive covenants within the agreement are deemed unenforceable due to their scope (area, business activity prohibited, length of time, or other terms), the invalid provision will be modified or limited. This modification will occur to the extent necessary to make the provision valid and enforceable, adhering as closely as possible to the original intent of both parties as expressed in the provision, and under the laws applied in the forum where enforcement is sought.
This means that Healthsource Chiropractic aims to ensure that restrictive covenants, which are common in franchise agreements to protect the brand and its business interests, are upheld as much as legally possible. Instead of the entire covenant being thrown out, the agreement allows for adjustments to make it enforceable. This could involve reducing the geographic area covered by a non-compete clause or shortening the duration of a non-solicitation agreement.
For a prospective Healthsource Chiropractic franchisee, this clause implies that they should carefully consider the scope and terms of the restrictive covenants, understanding that these may be modified by a court to be enforceable. It also suggests that Healthsource Chiropractic is proactive in protecting its interests and will seek to enforce these covenants to the fullest extent permitted by law. Franchisees should seek legal counsel to fully understand the implications of these clauses and how they might be applied in their specific jurisdiction.
Moreover, the agreement specifies that if any lawful requirement or court order necessitates a greater advance notice of termination or non-renewal than what is stipulated in the agreement, or if any provision of the agreement is deemed invalid or unenforceable, the required advance notice, action, or revision will be substituted for the comparable provisions. The franchisee agrees to be bound by these modifications to the greatest extent lawfully permitted. This ensures that the franchise agreement remains compliant with local laws and regulations, adapting as necessary to maintain enforceability.