What are some examples of non-curable defaults that could lead to termination of my Healthsource Chiropractic franchise agreement, as defined in Section 15?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
the Development Agreement during the Development Period (including any monetary default) and you fail to cure such default within 30 days of receiving notice. | | h. | "Cause" defined – non-curable defaults | Section 6.2 | We may terminate the Development Agreement if you cease to actively engage in development activities in the Site Selection Area or otherwise abandon your development business for three consecutive months, or any shorter period that indicates an intent | | | Provision | Section in Development Agreement | Summary | |----|---------------------------------------------------------------------------------|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | by you to discontinue development of the Clinics within the Site Selection Area; you become insolvent or are adjudicated bankrupt, or if any action is taken by you, or by others against the you, under any insolvency, bankruptcy or reorganization act, or if you make an assignment for the benefit or creditors or a receiver is appointed by you; and any Franchise Agreement that is entered into in order to fulfill your development obligations under the Development Agreement is terminated or subject to termination by us, pursuant to the terms of that Franchise Agreement. | | i.
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 53–64)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, Section 6.2 of the Development Agreement outlines conditions under which the agreement can be terminated due to non-curable defaults. These include ceasing active engagement in development activities within the Site Selection Area or abandoning the development business for three consecutive months, or any shorter period that indicates an intent to discontinue development of clinics in the area.
Additional non-curable defaults leading to termination involve scenarios where the developer becomes insolvent or is adjudicated bankrupt. Termination can also occur if any action is taken by the developer, or by others against the developer, under any insolvency, bankruptcy, or reorganization act. Furthermore, making an assignment for the benefit of creditors or having a receiver appointed also constitute non-curable defaults.
Finally, if any Franchise Agreement entered into to fulfill development obligations under the Development Agreement is terminated or subject to termination by Healthsource Chiropractic, this also constitutes a non-curable default that can lead to the termination of the Development Agreement. These stipulations protect Healthsource Chiropractic from developers who become unable or unwilling to fulfill their development obligations, ensuring the brand's continued growth and stability.