In the Healthsource Chiropractic FDD, what parties are considered to be engaged in a highly competitive business?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
contractors, or agents who may have access to the Confidential Information. You acknowledge and agree that we are under no duty or obligation to you to enforce any such Agreements for your or our benefit. Your duties and obligations with respect to Confidential Information shall survive the Transfer, termination or expiration of this Agreement.
9.3 Non-Competition Agreement and Other Restrictive Covenants.
a. Non-Competition. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among HealthSource Chiropractic franchises, if franchise owners of HealthSource Chiropractic franchises were permitted to hold interests in any competitive businesses (as described below). Therefore, during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the
immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at HealthSource Chiropractic Clinic franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
- b. Non-Disparagement. You agree that during the Term of this Agreement, and thereafter following any Transfer, termination or expiration of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the immediate family of any Principal Owner, will directly or indirectly make any negative or critical statements to any third parties, either verbally or in any other form or media, about (a) us, the Franchise, any of our franchisees or Regional Developer franchisees, or any of their respective products, services, businesses or business practices, or (b) the actions, operations or character of any of our or their respective owners, officers, directors, employees, consultants or agents.
- c. Non-Solicitation.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, several parties are restricted from engaging in competitive businesses. Specifically, during the term of the Franchise Agreement, the franchisee, any Principal Owner, and any member of their immediate family are prohibited from having any interest in businesses that offer similar products or services to Healthsource Chiropractic Clinic franchises. However, owning one percent (1%) or less of a publicly traded company is an exception to this rule.
This non-compete clause ensures that franchisees and their close family members do not operate or invest in competing businesses that could undermine the Healthsource Chiropractic system. This restriction applies during the term of the agreement, which means while the franchisee is actively operating a Healthsource Chiropractic franchise. The clause aims to protect Healthsource Chiropractic's confidential information and maintain a collaborative environment among its franchisees.
After the agreement terminates, the licensed provider is restricted from engaging in a competitive business within a five-mile radius of the former Healthsource Chiropractic location for two years. Additionally, the franchisee cannot assign telephone numbers to a competitive business or forward calls to a competitor. These measures prevent franchisees from immediately leveraging their Healthsource Chiropractic experience and resources to benefit a competing venture, safeguarding Healthsource Chiropractic's market position and brand reputation.