What is the consequence if a receiver is appointed for a Healthsource Chiropractic franchisee?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 6.1 | The term begins on the effective date and ends on the earlier of the date you open the last Clinic you are required to open under your Development Schedule or the expiration of your Development Schedule. |
| b. | Renewal or extension of the term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | Franchisees may terminate the agreements under any grounds permitted by state law. |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with cause | Section 6.2 | We may terminate your Development Agreement with cause as described in (g)-(h) of this Item 17 Chart. |
| g. | "Cause" defined – curable defaults | Section 6.2 | We may terminate the Development Agreement if you fail to meet your development obligations under the Development Agreement during the Development Period (including any monetary default) and you fail to cure such default within 30 days of receiving notice. |
| h. | "Cause" defined – non-curable defaults | Section 6.2 | We may terminate the Development Agreement if you cease to actively engage in development activities in the Site Selection Area or otherwise abandon your development business for three consecutive months, or any shorter period that indicates an intent |
| Provision | Section in Development Agreement | Summary |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 53–64)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, if a receiver is appointed for a franchisee, it constitutes a non-curable default under the Development Agreement. Specifically, Healthsource Chiropractic can terminate the Development Agreement if a receiver is appointed for the franchisee.
This means that Healthsource Chiropractic has the right to end the agreement, preventing the franchisee from further developing clinics within their designated area. This is a significant risk for potential developers, as it means that financial instability leading to the appointment of a receiver can result in the loss of their franchise rights.
This provision is fairly standard in franchising, as franchisors typically want to protect their brand and system from the potential damage that could arise from a financially unstable franchisee. Prospective Healthsource Chiropractic franchisees should carefully consider their financial situation and business plan to minimize the risk of such an event occurring.