What happens if a Healthsource Chiropractic franchisee ceases development activities for a certain period?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 6.1 | The term begins on the effective date and ends on the earlier of the date you open the last Clinic you are required to open under your Development Schedule or the expiration of your Development Schedule. |
| b. | Renewal or extension of the term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | Franchisees may terminate the agreements under any grounds permitted by state law. |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with cause | Section 6.2 | We may terminate your Development Agreement with cause as described in (g)-(h) of this Item 17 Chart. |
| g. | "Cause" defined – curable defaults | Section 6.2 | We may terminate the Development Agreement if you fail to meet your development obligations under the Development Agreement during the Development Period (including any monetary default) and you fail to cure such default within 30 days of receiving notice. |
| h. | "Cause" defined – non-curable defaults | Section 6.2 | We may terminate the Development Agreement if you cease to actively engage in development activities in the Site Selection Area or otherwise abandon your development business for three consecutive months, or any shorter period that indicates an intent |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 53–64)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the franchisor can terminate the Development Agreement if the franchisee ceases to actively engage in development activities in the Site Selection Area or otherwise abandons their development business for three consecutive months. The termination can also occur for any shorter period that indicates an intent to discontinue development of the Clinics within the Site Selection Area.
This provision protects Healthsource Chiropractic by ensuring that franchisees actively pursue the development schedule outlined in their agreement. If a franchisee becomes inactive or demonstrates an intention to stop developing clinics, Healthsource Chiropractic reserves the right to terminate the agreement. This prevents franchisees from holding territories without developing them, which could hinder the brand's overall growth and market penetration.
For a prospective Healthsource Chiropractic franchisee, this means that consistent effort in developing the agreed-upon number of clinics within the specified timeframe is crucial. Any prolonged inactivity or indication of abandoning the development plan could lead to termination of the Development Agreement. Franchisees should maintain open communication with Healthsource Chiropractic regarding any challenges or potential delays in their development schedule to avoid misunderstandings and potential termination.