In the event of a transfer of a Healthsource Chiropractic Franchise Agreement, what agreement must the assignor make?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
of the lease of the Premises to the Proposed New Owner;
- e. you must pay us a non-refundable Transfer fee in the amount of $10,000.00 concurrently with the execution of the Transfer Agreement, described in Section 14.5f below, and you must reimburse us for any reasonable expenses incurred by us in investigating and processing any Proposed New Owner where the Transfer is not consummated for any reason;
- f. you and your Principal Owners must execute a Transfer Agreement, which will include (i) a general release (in a form satisfactory to us) of any and all claims you and/or they may have against us, our affiliates, and our and our affiliates' respective officers, directors, employees, and agents, and (ii) acknowledgment that the restrictive covenants set forth in Article 9 of this Agreement will survive the Transfer to the extent set forth therein;
- g. we must approve the material terms and conditions of the proposed Transfer, including without limitation that the price and terms of payment are not so burdensome as to adversely affect the operation of the Franchise;
- h.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 51–52)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, if a franchisee wishes to transfer their Franchise Agreement, they and their Principal Owners must execute a Transfer Agreement. This agreement includes two key provisions. First, it requires a general release, in a form satisfactory to Healthsource Chiropractic, that releases any and all claims the franchisee and/or their Principal Owners may have against Healthsource Chiropractic, its affiliates, and their respective officers, directors, employees, and agents. Second, the Transfer Agreement must include an acknowledgment that the restrictive covenants outlined in Article 9 of the Franchise Agreement will remain in effect even after the transfer, to the extent specified in those covenants.
In addition to the Transfer Agreement, the assignor and their Principal Owners must also enter into an agreement with Healthsource Chiropractic regarding the payment of the purchase price. This agreement stipulates that any obligations of the Proposed New Owner to make installment payments of the purchase price (including any interest) to the assignor or their Principal Owners will be subordinate to the Proposed New Owner's obligations to pay any amounts due under the existing Franchise Agreement or any new Franchise Agreement that Healthsource Chiropractic may require the Proposed New Owner to sign as part of the transfer. This agreement must also contain a general release of any claims that the assignor may have against Healthsource Chiropractic.
These requirements ensure that Healthsource Chiropractic maintains control over the transfer process and protects its interests. The release of claims prevents future legal disputes, while the subordination of payments ensures that Healthsource Chiropractic's fees are prioritized. The continuation of restrictive covenants safeguards Healthsource Chiropractic's business practices and confidential information. Prospective franchisees should carefully review these transfer conditions and understand their obligations before entering into a Franchise Agreement with Healthsource Chiropractic.