Who can enforce the Healthsource Chiropractic franchise agreement besides the Franchisor?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
In In re: Franchise No Poaching Provisions, HealthSource Chiropractic, Inc., State of Washington, King County Superior Court No. 19-2-27562-6 SEA, on October 18, 2019, the Attorney General of the State of Washington alleged certain provisions contained in
HealthSource's prior versions of the franchise agreement contained "no-poach" provisions, and also alleged these provisions could constitute a violation of the State of Washington's Consumer Protection Act, RCW 19.86.030. Specifically, HealthSource's franchise agreement previously contained language that prohibited a franchisee from soliciting or hiring employees who worked for HealthSource during the term of the franchise agreement, or who worked for that particular franchise location if the current franchise owner sold the clinic and left the HealthSource system.
HealthSource and the State of Washington entered into an Assurance of Discontinuance whereby HealthSource agreed to not enforce any "no-poach" provisions contained in any existing franchise agreements, to amend franchise agreements with entities within the State of Washington to remove any "no-poach" provisions, and to not include any "no-poach" provisions in franchise agreements in the future. The Assurance of Discontinuance resolved all issues raised by the State of Washington against HealthSource, and HealthSource has fully performed its duties under the Assurance of Discontinuance.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, besides Healthsource Chiropractic itself, the Attorney General of the State of Washington has taken action regarding franchise agreement provisions.
Specifically, in In re: Franchise No Poaching Provisions, HealthSource Chiropractic, Inc., the Attorney General of the State of Washington alleged that certain provisions in Healthsource Chiropractic's prior franchise agreements contained "no-poach" provisions that could violate the State of Washington's Consumer Protection Act. These provisions previously restricted franchisees from soliciting or hiring employees who worked for Healthsource Chiropractic or for a particular franchise location if the owner sold the clinic and left the Healthsource system.
To resolve the issues raised by the State of Washington, Healthsource Chiropractic entered into an Assurance of Discontinuance. As part of this agreement, Healthsource Chiropractic agreed not to enforce any "no-poach" provisions in existing franchise agreements, to amend agreements with entities in Washington to remove such provisions, and to refrain from including them in future agreements. The Assurance of Discontinuance was a full resolution of the issues, and Healthsource Chiropractic has performed all required duties under it. This demonstrates that state authorities can play a role in enforcing or challenging aspects of the franchise agreement, particularly those related to consumer protection and fair labor practices.