Does a Healthsource Chiropractic developer retain any territorial rights after the Development Agreement expires?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
best efforts to promote and enhance the business of the Franchise for the entire Initial Term, and any subsequent renewal or extension of the Term of this Agreement.
- 2.3 Protected Territory; Reference to Exhibit 1; Reservation of Rights. You acknowledge that the Franchise granted by this Agreement gives you the right to operate your Franchise only at the Premises. Provided you are in full compliance with this Agreement, neither we nor our affiliates will operate or grant a franchise for the operation of another Clinic franchise physically located within the territory described in Exhibit 1 (the "Protected Territory"). You and we will mutually designate your Protected Territory upon or after the signing of this Agreement and Exhibit 1 shall be deemed to be automatically updated and revised to reflect such designation or any mutually agreed upon changes to your Protected Territory.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic FDD, the franchise agreement grants the franchisee the right to operate their franchise only at the specified premises. The agreement also states that, provided the franchisee is in full compliance with the agreement, Healthsource Chiropractic will not operate or grant a franchise for another clinic physically located within the territory described in Exhibit 1, referred to as the "Protected Territory".
However, upon termination or expiration of the franchise agreement, the franchisee's rights, including the right to use the Healthsource Chiropractic marks or any confidential information, also terminate or expire. The franchisee must also remove any branding that would associate the premises with Healthsource Chiropractic. This includes signage, posters, furniture, equipment, products, or display units bearing the Healthsource Chiropractic marks.
Therefore, a Healthsource Chiropractic developer does not retain territorial rights after the Development Agreement expires. The Protected Territory only exists while the franchise agreement is active and in good standing. After termination or expiration, Healthsource Chiropractic is free to operate or grant franchises to others within the former franchisee's territory.