Is the Healthsource Chiropractic Development Agreement considered a Franchise Agreement?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. From time to time we grant to persons who meet our qualifications, franchises to own and operate a HealthSource Chiropractic Clinic in accordance with the System in a specified geographic territory. This Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own, and be franchised to operate a HealthSource Chiropractic Clinic (we refer to your HealthSource Chiropractic franchise hereinafter as the "Franchise" or the "Franchised Business"). You may purchase and operate your Franchise as a new, start-up Clinic (a "Start-up Clinic"), or may convert an existing chiropractic practice to a HealthSource Chiropractic Clinic (a "Conversion Clinic").
- c. In certain cases, where permitted by law, we may offer franchises to persons or legal entities that meet our qualifications but are not licensed to practice or provide chiropractic care, and are willing to undertake the investment and effort to own and operate a business that will manage a Start-Up or Conversion Clinic under the System; we refer to these businesses as "Clinic Management Businesses." For example, certain states do not permit non-licensed persons to own and/or operate chiropractic practices, but some states do. In states that do not permit non-licensed persons to own or operate chiropractic practices, a Clinic Management Business may be offered. In states that do permit non-licensed persons to own and operate chiropractic practices, a Clinic Management Business Franchise is not necessary, but may be offered by us under certain circumstances.
As further described below, to operate a Clinic Management Business, you must enter into a Franchise Agreement with us and a Management Agreement with a "PC" that will own and operate the Clinic. A "PC" will be one or more licensed individuals, or a professional corporation or similar entity, such as a professional limited liability company, that is duly authorized to provide chiropractic services under local and state laws. In such an arrangement:
- You, as franchisee, will construct or build-out the Clinic for use by the PC.
- The Clinic business will be operated by the PC using the HealthSource name and Marks.
- In addition to signing the Franchise Agreement with us, before you begin operating the Clinic Management Business, you must enter into a management agreement
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Agreement, the agreement presented is related to obtaining the right to develop, own, and operate a HealthSource Chiropractic Clinic. The document refers to the HealthSource Chiropractic franchise as the "Franchise" or the "Franchised Business."
The agreement outlines two ways to operate a franchise: as a new, start-up clinic or by converting an existing chiropractic practice. In specific cases, where permitted by law, Healthsource Chiropractic may offer franchises to individuals or entities that are not licensed to practice chiropractic care but are willing to invest in and manage a clinic. These are referred to as "Clinic Management Businesses."
To operate a Clinic Management Business, a franchisee must enter into a Franchise Agreement with Healthsource Chiropractic and a Management Agreement with a licensed professional or professional corporation (PC) that will own and operate the clinic. The franchisee will construct the clinic, and the PC will operate the business using the Healthsource name and marks. This arrangement is subject to local and state laws regarding the ownership and operation of chiropractic practices.