Does HealthSource Chiropractic assume fiduciary responsibility to franchisees regarding the management of the Ad Fund?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
You understand and acknowledge that the Ad Fund will be intended to maximize recognition of the Marks and the goodwill and patronage of HealthSource Chiropractic Clinic franchises. Although we will endeavor to use the Ad Fund to develop advertising and marketing materials, and to place advertising in a manner that will benefit all HealthSource Chiropractic Clinic franchises, we undertake no obligation in developing, implementing, or administering advertising or promotional programs to ensure that expenditures by the Ad Fund in or affecting any geographic area are proportionate or equivalent to contributions to the Ad Fund by HealthSource Chiropractic Clinic franchises operating in that geographic area, or that any HealthSource Chiropractic Clinic franchise will benefit directly or in proportion to its contribution to the Ad Fund from the development of advertising and marketing materials or the placement of advertising. HealthSource Chiropractic shall not be a fiduciary to you with respect to the management of the Ad Fund. Except as expressly provided in this Paragraph, we assume no direct or indirect liability or obligation to you with respect to the maintenance, direction, or administration of the Ad Fund.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 HealthSource Chiropractic Franchise Disclosure Document, HealthSource Chiropractic does not assume a fiduciary responsibility to franchisees regarding the management of the Ad Fund. The document states that HealthSource Chiropractic is not a fiduciary with respect to the management of the Ad Fund and assumes no direct or indirect liability or obligation to franchisees regarding the maintenance, direction, or administration of the Ad Fund.
This means that while HealthSource Chiropractic will endeavor to use the Ad Fund to maximize recognition of the HealthSource Chiropractic Clinic franchises, they are not obligated to ensure that expenditures in any geographic area are proportionate to contributions from franchisees in that area. Nor are they obligated to ensure that any specific HealthSource Chiropractic franchise will benefit directly or in proportion to its contribution to the Ad Fund.
HealthSource Chiropractic retains sole discretion over the advertising programs financed by the Ad Fund, including creative concepts, materials, media used, and the geographic, market, and media placement and allocation of the programs. The Ad Fund can be used to cover various costs related to advertising and promotional activities, such as television, radio, internet, and marketing research. While an annual, unaudited statement of monies collected and costs incurred by the Ad Fund will be made available to franchisees upon written request, HealthSource Chiropractic's lack of fiduciary responsibility means franchisees have limited recourse if they disagree with how the funds are managed.