How does Healthsource Chiropractic define 'Gross Revenues' for its franchises, and what data source is used?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
or compensation paid to a franchise owner. Expense data used in this calculation is collected from franchisees that timely respond to our request for such information.
"Gross Revenues" means funds actually received and collected for the services/product provided to patients of the Qualifying Units. This data is gathered from our HSWorx billing software.
"Participating Franchisees" are the Qualifying Units that returned sufficient cost data to be used in the study. There were 74 Participating Franchises for the 2024 fiscal year.
"Patient" means a customer of a Clinic that converts to a treatment plan, which generally occurs after two initial visits.
Source: Item 19 — (FDD pages 64–71)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, 'Gross Revenues' are defined as the funds actually received and collected for services and products provided to patients by the franchise. This revenue data is gathered directly from the Healthsource Chiropractic's HSWorx billing software system. This definition is used in Item 19 to present financial performance representations.
For a prospective Healthsource Chiropractic franchisee, understanding this definition is crucial because Gross Revenues serve as the foundation for calculating other financial metrics, such as Gross Profit. Gross Profit is calculated by subtracting royalties, advertising fund contributions, technology fees, employee wages (excluding the owner's), rent, utilities, and HSWorx software license fees from Gross Revenues. The franchisee's compensation is not deducted when calculating Gross Profit.
The FDD uses Gross Revenues to present a year-over-year comparison of financial performance. For example, the 2025 FDD compares Gross Revenues from 2023 to 2024 for qualifying units. This allows potential franchisees to assess the revenue trends of existing Healthsource Chiropractic locations. The FDD also breaks down Gross Revenues by quartile, providing a more detailed view of performance across different segments of the franchise system.
It is important to note that Healthsource Chiropractic relies on franchisees to report expense data, which is then used to calculate Gross Profit. The accuracy and timeliness of this data are essential for the financial representations made in the FDD. Prospective franchisees should also be aware that financial performance can vary, and there is no guarantee that they will achieve the same results as existing Healthsource Chiropractic locations.