If a Healthsource Chiropractic franchisee signs the agreement pursuant to purchasing a development agreement, how does the development fee relate to the initial franchise fee?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
"Initial Franchise Fee") set forth below when you sign this Agreement. In recognition of the expenses we incur in furnishing assistance and services to you, you agree that
we will have fully earned the Initial Franchise Fee, and that is due and non-refundable when you sign this Agreement.
- a. If the Franchise you are purchasing is a Start-up Clinic, then your Initial Franchise Fee is $60,000.00. Notwithstanding the previous sentence, if Exhibit 1 states that you are signing this Agreement pursuant to your purchase of a development agreement, then your Development Fee paid pursuant thereto shall be in full satisfaction of this Agreement.
- b. If the Franchise you are purchasing is a Conversion Clinic, th
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the initial franchise fee for both start-up and conversion clinics is $60,000. However, if a franchisee is signing the agreement as part of a development agreement, the development fee paid will serve as full satisfaction of the initial franchise fee. This means that the franchisee will not have to pay the initial franchise fee separately if they have already paid a development fee under a development agreement.
This is a benefit for franchisees who choose to enter into a development agreement with Healthsource Chiropractic, as the development fee covers the initial franchise fee. A development agreement typically grants the franchisee the right to open multiple Healthsource Chiropractic locations within a specific territory. The development fee compensates Healthsource Chiropractic for granting the franchisee this exclusive right and providing support during the development phase.
Prospective franchisees should carefully review the terms of the development agreement to understand the full scope of the development fee and its relationship to the initial franchise fee for each Healthsource Chiropractic location they plan to open. It is also important to understand the obligations and responsibilities associated with the development agreement, such as the timeline for opening new locations and any performance requirements that must be met.