factual

What must a Healthsource Chiropractic franchisee provide to HealthSource Chiropractic upon termination of the franchise agreement?

Healthsource_Chiropractic Franchise · 2025 FDD

Answer from 2025 FDD Document

se any of the Confidential Information and agree not to use it in any business or for any other purpose. You further agree that all non-disclosure and related covenants set forth in Section 9 above shall survive such termination or expiration and you will immediately return to us all copies of the Operations Manual and any written Confidential Information or other confidential materials that we have loaned or provided to you.

  • 16.5 Other Actions. Upon termination of this Agreement for any reason, and in addition to any other provisions contained in this Agreement, the parties will have the following further rights and obligations:
  • a. You must promptly execute any documents and take any steps that in the judgment of HealthSource Chiropractic are necessary to delete your listings from classified telephone directories and on-line listings, disconnect, or, at HealthSource Chiropractic's option, assign to it all telephone numbers that have been used in your Franchised Business, assign to HealthSource Chiropractic any URLs, domain names, and social media and social networking names that you have used in connection with your Franchised Business, and terminate all other references that indicate you are or ever were affiliated with HealthSource Chiropractic. By signing this Agreement, you irrevocably appoint HealthSource Chiropractic your attorney-in-fact to take the actions described in this paragraph if you do not do so yourself within 10 days after termination of this Agreement. If HealthSource Chiropractic chooses not to have you assign the telephone numbers to it, you may not assign the telephone number to any competitive business, use automatic forwarding to the telephone number of any competitive business, or otherwise make the telephone number directly or indirectly available to any competitive business.
  • b. Your Principal Owners and General Manager must immediately comply with the restrictive covenants set forth in this Agreement and any Restrictive Covenants Agreement signed by your General Manager, as applicable.
  • c. You must give HealthSource Chiropractic a final accounting for your Franchised Business, and you must maintain all accounts and records for your Franchised Business for a period of not less than seven years after final payment of any amounts you owe to HealthSource Chiropractic, its affiliates, and/or related persons when this Agreement is terminated, but you may not sell, disclose, or otherwise transfer any of the information contained in those accounts and

records (other than patient records needed for their continuing care) to, or for use by, any competitive business.

If this Agreement is terminated because of your default, the rights of HealthSource Chiropractic described above or elsewhere in this Agreement may not necessarily be HealthSource Chiropractic's exclusive remedies but will instead supplement any other equitable or legal remedies available to HealthSource Chiropractic, including the right to withhold performance as provided in Section 15.4 of this Agreement. If this Agreement is terminated because of your default, nothing in this Section 16.5 may be construed to deprive HealthSource Chiropractic of the right to recover damages as compensation for lost profits.

16.6 Continuing Obligations. All obligations of this Agreement (whether yours or ours) that expressly or by their nature survive the expiration or termination of this Agreement will continue in full force and effect after and notwithstanding its expiration or termination until they are satisfied in full or by their nature expire. Without limiting the foregoing, you acknowledge and agree that your covenants in Article 9 above survive the termination or expiration of this Agreement to the extent set forth in such Article 9.

17. ENFORCEMENT.

17.1 Invalid Provisions; Substitution of Valid Provisions.

  • a. To the extent that any of the non-competition, non-solicitation, or other restrictive covenants of this Agreement are deemed unenforceable because of their scope in terms of area, business activity prohibited, length of time, or other terms, you agree that the invalid provision will be deemed modified or limited to the extent or manner necessary to make that particular provision valid and enforceable to the greatest extent possible in light of the intent of the parties expressed in such provision under the laws applied in the forum in that we are seeking to enforce such provision.
  • b.

Source: Item 23 — Receipts (FDD pages 77–282)

What This Means (2025 FDD)

According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, upon termination of the franchise agreement, a franchisee has several obligations to Healthsource Chiropractic. The franchisee must execute documents to remove their listings from directories and online, and either disconnect or assign telephone numbers used for the franchised business to Healthsource Chiropractic. Similarly, the franchisee must assign URLs, domain names, and social media names used for the business to Healthsource Chiropractic. If the franchisee fails to do so within 10 days, Healthsource Chiropractic is irrevocably appointed as their attorney-in-fact to take these actions.

Additionally, the franchisee must provide Healthsource Chiropractic with a final accounting of the franchised business. They are required to maintain all business accounts and records for at least seven years after the final payment of any amounts owed to Healthsource Chiropractic. However, the franchisee is prohibited from selling, disclosing, or transferring any information from these records to any competitive business, with the exception of patient records needed for continuing care.

Furthermore, the franchisee must pay all outstanding amounts owed to Healthsource Chiropractic or its affiliates within five days of the termination date. This includes unpaid initial franchise fees, continuing franchise fees, termination fees, damages, costs, and expenses, as well as any audit costs. The franchisee must also cease using any confidential information and return all copies of the Operations Manual and any written confidential information provided by Healthsource Chiropractic.

Finally, the franchisee must not identify any business they are associated with as a current or former Healthsource Chiropractic franchise and must not use any of Healthsource Chiropractic's marks or copyrightable works. They must return or destroy all customer lists, forms, and materials containing any mark or copyrightable works, remove all marks from uniforms, and take action to cancel any registrations relating to the use of any mark.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.