For a Healthsource Chiropractic franchise, what expenses are deducted from Gross Revenues to calculate 'Gross Profit'?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
ients divided by the number of people that attend only one or two visits and do not return for the third visit. This data is gathered from our HSWorx billing software.
"Gross Profit" means Gross Revenues minus royalties paid to us, Ad Fund contributions, Technology Fees paid to us, wages paid to employees other than the franchise owner, rent, utilities and license fees for the HSWorx software. Gross Profit does not deduct for compensation paid to a franchise owner. Expense data used in this calculation is collected from franchisees that timely respond to our request for such information.
"Gross Revenues" means funds actually received and collected for the services/product provided to patients of the Qualifying Units. This data is gathered from our HSWorx billing software.
"Participating Franchisees" are the Qualifying Units that returned sufficient cost data to be used in the study. There were 74 Participating Franchises for the 2024 fiscal year.
Source: Item 19 — (FDD pages 64–71)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, Gross Profit is calculated by subtracting several expenses from Gross Revenues. These expenses include royalties paid to Healthsource Chiropractic, Ad Fund contributions, Technology Fees paid to Healthsource Chiropractic, wages paid to employees other than the franchise owner, rent, utilities, and license fees for the HSWorx software.
It is important to note that the calculation of Gross Profit for a Healthsource Chiropractic franchise does not deduct compensation paid to the franchise owner. This means that the owner's salary or draw is not factored into the Gross Profit figure. The expense data used in this calculation is collected from franchisees that respond to Healthsource Chiropractic's request for such information.
For the 2024 fiscal year, 74 Participating Franchisees provided the data used to calculate the average expenses. These franchisees reported average expenses of 6.0% of Gross Revenues for monthly royalty, 1.9% of Gross Revenues for Ad Fund contribution, 9.8% of Gross Revenues for rent and utilities, 29.3% of Gross Revenues for non-owner wages, and $9,600 per year for Technology Fee and mandatory software fees. A prospective franchisee can use these percentages to estimate potential Gross Profit based on projected Gross Revenues, keeping in mind that these are averages and individual results may vary.