Is a Healthsource Chiropractic franchisee required to impose restrictions on disclosure of confidential information to their employees?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 53–64)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, franchisees are obligated to uphold non-disclosure covenants as detailed in Section 9 of the Franchise Agreement. Specifically, upon termination or non-renewal of the franchise agreement, the franchisee must cease using all confidential information.
This obligation extends beyond the franchisee themselves, implying a need to ensure that employees also do not disclose confidential information. While the FDD excerpt does not explicitly state that franchisees must impose restrictions on their employees, the franchisee remains responsible for protecting Healthsource Chiropractic's confidential information. Therefore, a franchisee would likely need to implement measures to prevent employees from disclosing such information, as the franchisee is ultimately accountable for any breaches.
In practical terms, a prospective Healthsource Chiropractic franchisee should clarify with the franchisor the specific measures they are expected to take to ensure employee compliance with non-disclosure obligations. This might involve including confidentiality clauses in employment contracts, conducting training on confidential information, and implementing security protocols to protect sensitive data. Understanding these expectations is crucial for franchisees to avoid potential breaches of the franchise agreement and associated penalties.