Is Healthsource Chiropractic allowed to restrict a Franchise Owner from soliciting or hiring employees of other franchisees in Washington?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
RCW 49.62.060 prohibits a franchisor from restricting, restraining, or prohibiting a franchisee from (i) soliciting or hiring any employee of a franchisee of the same franchisor or (ii) soliciting or hiring any employee of the franchisor. As a result, any such provisions contained in the franchise agreement or elsewhere are void and unenforceable in Washington.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic FDD, Healthsource Chiropractic cannot restrict a franchisee from soliciting or hiring employees of other franchisees within Washington state. The FDD references RCW 49.62.060, a Washington state law that prohibits franchisors from imposing such restrictions. Therefore, any provisions in the franchise agreement that conflict with this law are considered void and unenforceable in Washington. This protection extends to soliciting or hiring employees of the franchisor as well.
This stems from a prior legal issue in Washington State. In 2019, the Attorney General of Washington alleged that HealthSource's previous franchise agreements contained "no-poach" provisions that violated the state's Consumer Protection Act. These provisions restricted franchisees from soliciting or hiring employees who worked for HealthSource or at a particular franchise location if the owner sold the clinic and left the HealthSource system.
To resolve these concerns, HealthSource Chiropractic entered into an Assurance of Discontinuance with the State of Washington. As part of this agreement, HealthSource committed to not enforcing any existing "no-poach" provisions, to amend franchise agreements in Washington to remove such provisions, and to refrain from including them in future agreements. The FDD states that HealthSource has fully complied with this agreement.
For a prospective franchisee in Washington, this means that Healthsource Chiropractic cannot prevent them from hiring or soliciting employees from other Healthsource Chiropractic locations or from Healthsource Chiropractic itself. This could provide greater flexibility in staffing their clinic. However, it is important to note that Healthsource Chiropractic still requires franchisees to adhere to other employment-related obligations, such as implementing prescribed training programs, ensuring employees maintain a professional appearance, and having employees sign confidentiality agreements.