Besides the franchisee, who else is bound by the non-disparagement and non-solicitation clauses in the Healthsource Chiropractic agreement?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. Non-Disparagement. You agree that during the Term of this Agreement, and thereafter following any Transfer, termination or expiration of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, will directly or indirectly make any negative or critical statements to any third parties, either verbally or in any other form or media, about (a) us, the Franchise, any of our franchisees or Regional Developer franchisees, or any of their respective products, services, businesses or business practices, or (b) the actions, operations or character of any of our or their respective owners, officers, directors, employees, consultants or agents.
- c. Non-Solicitation. You agree that during the Term of this Agreement, and thereafter for a period of two (2) years following any Transfer, termination or expiration of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, will directly or indirectly (a) solicit for chiropractic, physical therapy, rehabilitation, weight loss, or related services or products with any person who was a patient of the Franchise within the two year period prior to such Transfer, termination or expiration; or (b) interfere with our relationship with any of our franchisees, Regional Developer franchisees, vendors, suppliers or referral sources.
- d. General Managers to Sign Agreement. You further agree that you will cause each General Manager to enter into and deliver to us a Restrictive Covenant Agreement in such form as we may approve, either concurrently with the execution of this Agreement or at such later date when the affiliation of such person with you is established. You acknowledge and agree that we are under no duty or obligation to you to enforce any such Agreements for your or our benefit. The duties and obligations imposed in the Restrictive Covenant Agreement shall survive the Transfer, expiration or earlier termination of this Agreement.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, the non-disparagement and non-solicitation clauses extend beyond just the franchisee. Specifically, these clauses also apply to any Principal Owner and any member of their immediate family, as well as members of the immediate family of any Principal Owner. This means that these individuals are also restricted from making negative statements about the franchise or soliciting patients or interfering with Healthsource Chiropractic's relationships with franchisees, vendors, or suppliers.
This broad application of the non-disparagement and non-solicitation clauses is fairly common in franchising to protect the brand's reputation and business relationships. By including principal owners and their immediate family members, Healthsource Chiropractic aims to prevent potential damage that could arise from those closely associated with the franchisee. This ensures a consistent message and behavior aligned with the brand's interests.
For a prospective Healthsource Chiropractic franchisee, this means it's crucial to ensure that all principal owners and their immediate family members understand and are willing to comply with these restrictions. Failure to do so could result in a breach of the franchise agreement, leading to potential legal and financial repercussions. Franchisees should have open discussions with their family members and principal owners about these obligations to avoid any misunderstandings or unintentional violations.
Additionally, Healthsource Chiropractic requires each General Manager to sign a Restrictive Covenant Agreement. This agreement is in a form that Healthsource Chiropractic approves and must be delivered either when the Franchise Agreement is executed or when the person becomes affiliated with the franchisee. Healthsource Chiropractic is not obligated to enforce these agreements for the franchisee's or their own benefit. The obligations in the Restrictive Covenant Agreement survive any transfer, expiration, or earlier termination of the Franchise Agreement.