When is the Development Fee for a Healthsource Chiropractic development agreement payable to the Franchisor?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
The Development Fee is fully earned upon payment and is not refundable under any circumstances; and payable to Franchisor immediately on Developer's execution of this Agreement.
- 2.1 The parties agree and acknowledge that the Development Fee is comprised of the franchise fee payable in connection with: (i) the initial Clinic that Developer is granted the right to open within the Site Selection Area under this Agreement (the "Initial Clinic"); and (ii) each additional Clinic that Franchisor has granted Developer the right to open hereunder (each, an "Additional Clinic").
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the Development Fee is payable immediately upon the Developer's execution of the Development Agreement. The document specifies that the Development Fee is considered fully earned by Healthsource Chiropractic upon payment and is non-refundable under any circumstances.
This means that a prospective Healthsource Chiropractic developer must be prepared to pay the full Development Fee at the time of signing the agreement. This fee covers the rights to open an initial clinic and any additional clinics within the designated Site Selection Area. The Development Fee is comprised of the franchise fee payable in connection with the initial clinic and each additional clinic that Healthsource Chiropractic has granted the developer the right to open.
Furthermore, the FDD emphasizes the importance of adhering to the Development Schedule outlined in the agreement. The developer is obligated to open and operate a specific number of new clinics within defined Development Periods and maintain a minimum cumulative number of open clinics at the end of each period. Failure to comply with the Development Schedule can result in the termination of the agreement if not cured within the specified timeframe. Therefore, prospective developers should carefully review the Development Schedule and ensure they have the resources and capabilities to meet these obligations before signing the agreement and paying the Development Fee.
In summary, the immediate payment and non-refundable nature of the Development Fee, coupled with the strict adherence required to the Development Schedule, highlight the financial commitment and operational responsibilities that a Healthsource Chiropractic developer must undertake. It is crucial for potential developers to conduct thorough due diligence and assess their ability to meet these requirements before entering into a development agreement with Healthsource Chiropractic.