What is the amount of Liquidated Damages Resulting from Violation of Restrictive Covenants for a Healthsource Chiropractic franchise, and what additional costs might be incurred?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages Resulting from Violation of Restrictive Covenants | $50,000, plus any actual damages incurred by us exceeding that amount, and all attorneys' fees and costs incurred by us, to enforce the restrictive covenants in Section 9 of the Franchise Agreement | On demand | Payable if a Principal Owner violates the terms of the restrictive covenants in Section 9 of the Franchise Agreement, including but not limited to non compete, non-solicitation, non disclosure and non disparagement covenants, both during the term of the Franchise Agreement and post-termination |
Source: Item 6 — Other Fees (FDD pages 17–23)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, a Principal Owner who violates the restrictive covenants in Section 9 of the Franchise Agreement may incur liquidated damages. These covenants include non-compete, non-solicitation, non-disclosure, and non-disparagement agreements, applicable both during and after the franchise term.
The liquidated damages amount to $50,000, payable on demand. In addition to this amount, Healthsource Chiropractic may also charge any actual damages exceeding $50,000 if they were incurred as a result of the violation.
Furthermore, the franchisee is responsible for all attorneys' fees and costs incurred by Healthsource Chiropractic to enforce these restrictive covenants. This means that the total financial burden on a franchisee violating these covenants could significantly exceed the initial $50,000 liquidated damages figure, depending on the extent of the actual damages and the legal costs involved in enforcing the agreement.