Is a general release of claims required when transferring a Healthsource Chiropractic franchise?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
of the lease of the Premises to the Proposed New Owner;
- e. you must pay us a non-refundable Transfer fee in the amount of $10,000.00 concurrently with the execution of the Transfer Agreement, described in Section 14.5f below, and you must reimburse us for any reasonable expenses incurred by us in investigating and processing any Proposed New Owner where the Transfer is not consummated for any reason;
- f. you and your Principal Owners must execute a Transfer Agreement, which will include (i) a general release (in a form satisfactory to us) of any and all claims you and/or they may have against us, our affiliates, and our and our affiliates' respective officers, directors, employees, and agents, and (ii) acknowledgment that the restrictive covenants set forth in Article 9 of this Agreement will survive the Transfer to the extent set forth therein;
- g. we must approve the material terms and conditions of the proposed Transfer, including without limitation that the price and terms of payment are not so burdensome as to adversely affect the operation of the Franchise;
- h.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, a general release of claims is required from both the franchisee and their principal owners when transferring a franchise. Specifically, the franchisee and their Principal Owners must execute a Transfer Agreement that includes a general release of any and all claims they may have against Healthsource Chiropractic, its affiliates, and their respective officers, directors, employees, and agents, in a form satisfactory to Healthsource Chiropractic.
Additionally, the franchisee and their Principal Owners must enter into an agreement with Healthsource Chiropractic providing that all obligations of the Proposed New Owner to make installment payments of the purchase price to them will be subordinate to the obligations of the Proposed New Owner to pay any amounts payable under the Franchise Agreement. This agreement must also contain a general release of any claims that the franchisee may have against Healthsource Chiropractic.
This requirement protects Healthsource Chiropractic from potential future legal claims by the outgoing franchisee after the transfer is completed. It is a fairly standard practice in franchising to include such a release to ensure a clean break and avoid future disputes. Prospective franchisees should carefully review the terms of the release and consult with an attorney to understand the full scope of what they are giving up before signing.