Does the Healthsource Chiropractic agreement require Healthsource Chiropractic to reasonably approve all of the franchisee's actions or requests?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, Healthsource Chiropractic retains discretion in its decision-making, but does not guarantee to reasonably approve all franchisee actions or requests. Specifically, Healthsource Chiropractic can make decisions based on its business judgment.
According to the agreement, even if there are multiple motives or arguably better alternatives, as long as one motive is a reasonable business justification, the decision will not be subject to challenge for abuse of discretion. This indicates that Healthsource Chiropractic has considerable leeway in its decision-making process.
If a franchisee challenges Healthsource Chiropractic's discretion, the agreement directs that reliance on a business reason should be viewed as a reasonable and proper exercise of discretion. This clause protects Healthsource Chiropractic's decision-making authority, even if other reasons exist or a third party might weigh the business reason differently. This means that franchisees may face limitations in contesting Healthsource Chiropractic's decisions, as long as the franchisor can demonstrate a reasonable business justification.