Are franchisees required to respond to Healthsource Chiropractic's request for expense data to be included as a 'Participating Franchisee'?
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.
"Patient" means a customer of a Clinic that converts to a treatment plan, which generally occurs after two initial visits.
Source: Item 19 — (FDD pages 64–71)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, franchisees are not explicitly required to respond to requests for expense data. However, a franchisee's participation directly impacts whether their financial information is included in the 'Gross Profit' calculations presented in Item 19.
Specifically, Healthsource Chiropractic calculates 'Gross Profit' by deducting royalties, advertising fund contributions, technology fees, wages (excluding the owner's), rent, utilities, and HSWorx software license fees from gross revenues. The document states that the expense data used for this calculation is collected from franchisees who 'timely respond' to Healthsource Chiropractic's requests. Those who respond and provide sufficient data are designated as 'Participating Franchisees.' For the 2024 fiscal year, 74 out of 119 'Qualifying Units' were classified as Participating Franchisees.
While not mandatory, providing this data allows Healthsource Chiropractic to include the franchisee's financial performance in the aggregated data presented in Item 19, which could be beneficial for prospective franchisees evaluating the financial potential of a Healthsource Chiropractic franchise. A prospective franchisee should consider the implications of not participating and potentially missing out on contributing to, and being represented in, the financial performance data shared with future franchisees.