What costs is the Healthsource Chiropractic franchisee liable for if the franchisor prevails in an action?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
ed for as a single performance obligation. Sales prices for new franchises range from $45,000 to $60,000, and depends on the number of franchises being purchased. To transfer a franchise is $10,000.
The number of franchises sold in 2024 was 16, sold in 2023 was 21, and sold in 2022 was 36. There were 184, 187 and 179, Healthsource franchises at December 31, 2024, 2023, and 2022, respectively, none of which were owned by HealthSource Chiropractic, Inc. There were 132 franchisees in operation at December 31, 2024.
NOTE M - REVENUE CONT'D:
Royalty Revenue
Royalty payment obligations payable by franchisees to Healt
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Agreement, if a franchisee terminates the franchise agreement before its expiration date, they may incur termination fees, which are agreed upon sums. Additionally, franchisees are obligated to make Ad Fund payments, calculated at two percent (2%) of sales, and Technology Fund payments of $199 per month. These fees are used for advertising, promotional activities, and technology-related expenses.
Upon termination of the agreement, the franchisee is responsible for promptly executing documents to remove their listings from directories and online platforms, and assigning telephone numbers and URLs to Healthsource Chiropractic. Failure to comply allows Healthsource Chiropractic to act as the franchisee's attorney-in-fact to complete these actions. The franchisee must also provide a final accounting of their business and maintain records for at least seven years, without disclosing the information to any competitive business.
Healthsource Chiropractic may withhold its obligations if the franchisee is not in full compliance with the agreement and operations manual. This includes denying access to the Healthsource Chiropractic website, removing the franchise from business locator pages, and removing the franchise from lists for approved vendors and alliance programs. These actions do not constitute a breach of the agreement by Healthsource Chiropractic, and the franchisor's failure to terminate the agreement does not waive its right to do so later.
If a franchisee retains possession of the premises after termination, they are responsible for removing or modifying any interior and exterior decor that associates the premises with Healthsource Chiropractic. This includes signage, posters, furniture, and equipment. If the franchisee fails to do so within 10 days of notice, Healthsource Chiropractic has the right to enter the premises and make the changes at the franchisee's expense, which the franchisee must reimburse on demand.