Does the Healthsource Chiropractic Franchise Agreement contain provisions related to renewal, termination, transfer and dispute resolution?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: Renewal, Termination, Transfer, and Dispute Resolution]
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| hereunder in any respect, then all | ||
| rights granted to you under the | ||
| Franchise | ||
| Agreement | ||
| shall | ||
| immediately | ||
| and | ||
| automatically | ||
| terminate and revert to us without | ||
| further notice to you or action on our | ||
| part. | ||
| Also, | ||
| in the event, in the opinion of | ||
| our legal counsel, any provision of the | ||
| Franchise Agreement is contrary to | ||
| law and we are not able to negotiate | ||
| an | ||
| amendment | ||
| to | ||
| the | ||
| Franchise | ||
| Agreement | ||
| to | ||
| conform | ||
| to | ||
| legal | ||
| requirements upon 30 days' notice, or | ||
| the | ||
| amendment | ||
| requires | ||
| a | ||
| fundamental change to the Franchise | ||
| Agreement, we may terminate the | ||
| Franchise Agreement. | ||
| i. Your obligations on termination/ non-renewal | Section 16 | You must pay all amounts owed to us; refrain from using our Marks, return to us or destroy (as we specify) all customer lists, forms and materials bearing our Marks or relating to the franchise; de-identify the franchise premises; return the Operations Manual; comply with covenants against competition and the non solicitation, non-disparagement, and non-disclosure covenants in Section 9 of the Franchise Agreement; and cease using all confidential information. |
| You irrevocably appoint us your | ||
| attorney-in-fact- to de-identify your | ||
| franchise premises and enforce your |
[Item 17: Renewal, Termination, Transfer, and Dispute Resolution]
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| u. Dispute resolution by arbitration or mediation | Section 17.9 | Except for certain claims, we and you must arbitrate all disputes in Lorain County, Ohio (subject to state law) before a single arbitrator with the American Arbitration Association. Except as we elect to enforce the Franchise Agreement or to seek temporary or permanent injunctive relief, before either party commences an arbitration, the parties agree that, as a condition precedent to the filing or commencement of any arbitration, they will attempt to resolve any dispute through internal mediation between the parties to be conducted in a mutually agreeable location, or if no such location is agreed upon within 10 days after a request for mediation, then at our corporate headquarters. In the event that no settlement or resolution between the parties can be |
| reached through internal mediation | ||
| within thirty (30) days following the | ||
| date on which a written request for | ||
| internal mediation is made by any | ||
| party, such dispute may be submitted | ||
| for arbitration. "Internal mediation" | ||
| shall consist of, among other things, | ||
| the parties having reasonable business | ||
| discussions, whether by telephone or | ||
| in person, concerning the dispute and | ||
| means of resolving the dispute. |
[Item 17: Renewal, Termination, Transfer, and Dispute Resolution]
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 9.3 and 17.8 | Neither you, your Principal Owners, General Managers, nor any immediate family members of you or your Principal Owners may perform services for or have any interest in any competitive business. |
| x. Non-solicitation and non disparagement covenants | Sections 4.1, 9.3 and 17.8 | The Franchise Agreement prohibits each Principal Owner from making any negative or critical statements to any third parties, either verbally or in any other form or media, about (a) the Franchisor, the Franchise, any of our franchisees or Regional Developer |
[Item 17: Renewal, Termination, Transfer, and Dispute Resolution]
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| franchisees, or any of their respective | ||
| products, | ||
| services, | ||
| businesses | ||
| or | ||
| business practices, or (b) the actions, | ||
| operations | ||
| or | ||
| character | ||
| of | ||
| the | ||
| Franchisor | ||
| or | ||
| the | ||
| Franchise's | ||
| respective owners, officers, directors, | ||
| employees, consultants or agents. | ||
| The | ||
| Franchise | ||
| Agreement | ||
| also | ||
| prohibits | ||
| each | ||
| Principal | ||
| Owner, | ||
| during the term of the Franchise | ||
| Agreement | ||
| and for a period of two (2) | ||
| years | ||
| following | ||
| the | ||
| expiration, | ||
| termination | ||
| or | ||
| Transfer | ||
| of | ||
| the | ||
| Franchise | ||
| Agreement, | ||
| from | ||
| (a) | ||
| soliciting for chiropractic, physical | ||
| therapy, | ||
| rehabilitation, | ||
| function | ||
| restoration, weight loss or related | ||
| services or products with any person | ||
| who was a patient of the Franchise | ||
| within the two year period prior to the | ||
| expiration, termination or Transfer of | ||
| the Franchise Agreement; or (b) | ||
| interfering | ||
| with | ||
| the | ||
| Franchisor's | ||
| relationship | ||
| with | ||
| any | ||
| of | ||
| the | ||
| Franchisor's | ||
| franchisees, | ||
| Regional | ||
| Developer | ||
| franchisees, | ||
| vendors, | ||
| suppliers or referral sources. | ||
| y. Non-disclosure covenants | Sections 4.1, 9.2 and 17.8 | You agree that at all times you (1) will not directly or indirectly use the Confidential Information in any other business or capacity or for any purpose other than as needed in the development and operation of the Franchise during the term of the Franchise Agreement; (2) will maintain the absolute confidentiality of the Confidential Information during and after the term of the Franchise Agreement and not directly or indirectly publish or otherwise disclose it to any third party; (3) will not make unauthorized copies of any portion of the Confidential Information disclosed in written form or another form or media that may be copied or duplicated; and (4) will |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 53–64)
What This Means (2025 FDD)
Yes, according to Healthsource Chiropractic's 2025 Franchise Disclosure Document, Item 17 and the provided tables summarize key provisions in the franchise agreement regarding renewal, termination, transfer, and dispute resolution.
Specifically, the Franchise Agreement outlines the franchisee's obligations upon termination or non-renewal in Section 16. These obligations include paying all outstanding amounts, ceasing the use of Healthsource Chiropractic's marks, returning or destroying customer lists and materials bearing their marks, de-identifying the franchise premises, returning the Operations Manual, and complying with non-compete, non-solicitation, non-disparagement, and non-disclosure covenants. The franchisee also irrevocably appoints Healthsource Chiropractic as their attorney-in-fact to de-identify the franchise premises and enforce these obligations.
Regarding dispute resolution, Section 17.9 of the Franchise Agreement mandates that all disputes (except for certain claims) be arbitrated in Lorain County, Ohio, before a single arbitrator with the American Arbitration Association, subject to state law. Prior to initiating arbitration, both parties must attempt to resolve the dispute through internal mediation, involving business discussions, either by phone or in person, to find a resolution. If no resolution is reached within 30 days of a written request for internal mediation, the dispute can then be submitted for arbitration.
The Franchise Agreement also addresses non-competition covenants, non-solicitation and non-disparagement covenants, and non-disclosure covenants. Section 9.3 and 17.8 state that neither the franchisee, their Principal Owners, General Managers, nor any immediate family members may perform services for or have any interest in any competitive business during the term of the franchise. Sections 4.1, 9.3 and 17.8 prohibit Principal Owners from making negative or critical statements about Healthsource Chiropractic or its franchisees. Sections 4.1, 9.2 and 17.8 outline the franchisee's agreement to maintain the confidentiality of Healthsource Chiropractic's confidential information.