Does a Healthsource Chiropractic franchisee have a right to cure a default, and under what circumstances?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
15.4 Withholding of Performance. HealthSource Chiropractic will perform its obligations under this Agreement if you are in full compliance with all or your duties and obligations to HealthSource Chiropractic under this Agreement and the Operations Manual (including any documents incorporated therein). If you are not in such compliance, we may, in our sole judgment, do any or all of the following until you fully correct the breach or default or HealthSource Chiropractic terminates this Agreement:
- a. deny you access to the HealthSource Chiropractic website or Intranet;
- b. remove your Franchised Business from the Franchised Business locator page and/or remove your interior pages, on the HealthSource Chiropractic Website;
- c. remove your Franchised Business from the list of Franchised Businesses to which inquiries are referred;
- d. remove your Franchised Business from the list of Franchised Businesses that are entitled to HealthSource Chiropractic-related discounts from approved vendors; and/or
- e. remove your Franchised Business from the list of Franchised Businesses that are approved to participate in national or other alliance programs.
HealthSource Chiropractic may take any or all of these actions in addition to or instead of giving you notice of default and/or termination under this Agreement. You acknowledge and agree that HealthSource Chiropractic's withholding of performance services in accordance with this Section 15.4 will not constitute a breach of this Agreement and/or a defense to the enforcement by us of any provision of this Agreement, including the right to receive payment of Continuing Franchise Fees as provided in Section 6.2. You also acknowledge and agree that, should we choose to withhold performance rather than terminate this Agreement, HealthSource Chiropractic's failure to exercise its right to terminate this Agreement will in no way constitute a waiver of its subsequent right to terminate this Agreement for the specified default or for any other default or to exercise any other remedies available to us under this Agreement, at law, or in equity.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic FDD, Healthsource Chiropractic may choose to withhold certain performance obligations if a franchisee is not in full compliance with their duties and obligations under the Franchise Agreement and Operations Manual. This withholding can occur until the franchisee fully corrects the breach or default, or until Healthsource Chiropractic terminates the agreement.
Specifically, Healthsource Chiropractic may deny access to the website or Intranet, remove the franchise from the business locator page, remove the franchise from lists for referred inquiries or vendor discounts, and remove the franchise from national or alliance programs. These actions can be taken instead of or in addition to providing a notice of default or termination.
The FDD states that Healthsource Chiropractic's decision to withhold performance will not be considered a breach of the agreement, nor will it prevent Healthsource Chiropractic from enforcing any provision of the agreement, including the right to receive Continuing Franchise Fees. Furthermore, if Healthsource Chiropractic chooses to withhold performance rather than terminate the agreement, it does not waive its right to terminate the agreement later for the same or any other default.