Does the franchisee have to pay Healthsource Chiropractic's attorney's fees if they breach the agreement?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- i. You agree not to recruit or hire, either directly or indirectly, any employee (or a former employee, for six (6) months after his or her employment has ended) of any HealthSource Chiropractic Clinic or Regional Developer franchise operated by us, our affiliates, or another HealthSource Chiropractic franchise owner without first obtaining the written consent of us, our affiliate, or the franchise owner that currently employs (or previously employed) such employee. (If you violate this provision, in addition to any other right or remedy we may have, you agree to pay the employee's current or former employer twice the employee's annual salary, plus all costs and attorneys' fees incurred as a result of the violation. This amount is set at twice the employee's annual salary because it is a reasonable estimation of the damages that would occur from such a breach, and it will almost certainly be impossible to calculate precisely the actual damages from such a breach).
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, if a franchisee violates a provision regarding the recruitment or hiring of employees from other Healthsource Chiropractic locations, they may be responsible for attorney's fees. Specifically, if a franchisee recruits or hires an employee (or a former employee within six months of their departure) from another Healthsource Chiropractic franchise, or from Healthsource Chiropractic itself, without prior written consent, they agree to pay twice the employee's annual salary. This payment includes all costs and attorney's fees incurred as a result of the violation.
Healthsource Chiropractic specifies that this amount, set at twice the employee's annual salary, is considered a reasonable estimation of damages resulting from such a breach. The document states that it would be nearly impossible to precisely calculate the actual damages from such a breach.
This clause serves as a deterrent against poaching employees within the Healthsource Chiropractic franchise system. It also provides a pre-determined method for calculating damages and covering legal costs should such a violation occur. Prospective franchisees should be aware of this potential liability and ensure they have proper procedures in place to avoid inadvertently violating this provision.