Following termination of a Healthsource Chiropractic agreement, what is the geographic radius within which the non-competition covenant applies?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Non-Competition. During the Agreement Term, Licensed Provider will not, 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 the Clinic. Licensed Provider's duties and obligations under this Section 10.3(a) shall survive for two (2) years following any termination or expiration of this Agreement; provided, however, that following such termination or expiration of this Agreement, this covenant shall only apply with respect to a competitive business that has a place of business located within a five (5) mile radius of the location of the Premises.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic FDD, if the franchise agreement is terminated, the non-competition covenant applies within a five-mile radius of the former Healthsource Chiropractic location. This restriction is in place for a period of two years following the termination or expiration of the agreement.
This means that after leaving the Healthsource Chiropractic system, a former franchisee cannot operate a similar business within that five-mile radius. This restriction aims to protect Healthsource Chiropractic's market share and confidential information.
For a prospective franchisee, this non-compete clause is an important consideration. It limits their options if they decide to leave the franchise system, potentially restricting their ability to continue in the same line of work in the immediate vicinity of their former location. Franchisees should carefully evaluate this restriction and its potential impact on their future plans before investing in a Healthsource Chiropractic franchise.