What constitutes a prohibited product or service for a Healthsource Chiropractic franchise?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
a. Non-Competition. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among HealthSource Chiropractic franchises, if franchise owners of HealthSource Chiropractic franchises were permitted to hold interests in any competitive businesses (as described below). Therefore, during the Term 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, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at HealthSource Chiropractic Clinic franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, a franchisee, any Principal Owner, or any member of their immediate family is prohibited from having any interest in a business that offers products or services that are the same as or similar to those offered or sold at HealthSource Chiropractic Clinic franchises during the term of the agreement. The only exception to this is the ownership of one percent (1%) or less of a publicly traded company. This restriction is part of the non-competition agreement designed to protect HealthSource Chiropractic's confidential information and encourage the exchange of ideas among franchisees.
This non-compete clause has significant implications for prospective franchisees. It restricts their ability to engage in any competitive business ventures, even passively, during the term of the franchise agreement. This could limit their income opportunities and require them to divest any existing interests in similar businesses. The exception for owning a small stake in a publicly traded company provides a minor allowance for investment diversification without posing a competitive threat.
Franchisees should carefully consider the scope and duration of this non-compete agreement. They should evaluate whether they have any existing business interests that would conflict with this provision and understand the potential impact on their future business activities. It is also important to note that the definition of 'Principal Owner' and 'immediate family' are not defined in this section, so a prospective franchisee should seek clarification from Healthsource Chiropractic on these terms to fully understand the restrictions.