If Healthsource Chiropractic operates other healthcare-related businesses, is Healthsource Chiropractic required to compensate franchisees if those businesses operate inside or outside of the Healthsource Chiropractic franchisee's protected territory?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
We and our affiliates reserve the right to engage in any activities we deem appropriate that your Franchise Agreement does not expressly prohibit, whenever and wherever we desire, including the right to (a) operate, or grant to others the right to operate, HealthSource Chiropractic Clinic franchises physically located outside of your Protected Territory on terms and conditions we deem appropriate; and (b) offer or operate other healthcare-related companies or franchises, or enter into other lines of business, offering products and services that are similar or dissimilar to those offered by HealthSource Chiropractic franchises, both in and outside of your Protected Territory, under trademarks and service marks other than the Marks without any compensation to you, and to use other channels of distribution (for example, the internet, email, social media, telemarketing, or other direct marketing) in connection with such system(s) and/or location(s); (c) the right to sell or distribute, at retail or wholesale, directly or indirectly, or via the internet or any other means, or license others to sell or distribute, via any means (including the internet and other channels of distribution) any products that bear any proprietary marks, including the Marks, whether within or outside your Protected Territory; (d) the right to own, acquire, establish, and/or operate, and license others to establish and operate, businesses different from HealthSource
Source: Item 12 — Territory (FDD pages 44–47)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, Healthsource Chiropractic and its affiliates retain the right to operate other healthcare-related companies or franchises, even those offering similar products and services to Healthsource Chiropractic franchises. These businesses can operate both inside and outside a franchisee's protected territory. Importantly, Healthsource Chiropractic is not obligated to provide any compensation to the franchisee under these circumstances. They are allowed to operate these other ventures under different trademarks and service marks.
This reservation of rights extends to various channels of distribution, including the internet, email, social media, telemarketing, and other direct marketing methods. Healthsource Chiropractic can utilize these channels for its other healthcare-related businesses without compensating franchisees. This means that even if these other businesses directly compete with a franchisee within their protected territory, Healthsource Chiropractic is not required to provide any financial reimbursement.
This policy has significant implications for prospective Healthsource Chiropractic franchisees. While franchisees are granted a protected territory, this protection does not extend to other healthcare-related businesses operated by Healthsource Chiropractic or its affiliates. Franchisees should be aware that Healthsource Chiropractic could potentially operate competing businesses within or outside their territory without any obligation to compensate them. This could impact a franchisee's market share and revenue potential.
It is important for potential franchisees to carefully consider this aspect of the franchise agreement and evaluate the potential impact of Healthsource Chiropractic's reserved rights on their investment. Understanding the scope of the protected territory and the exceptions to it is crucial for making an informed decision about investing in a Healthsource Chiropractic franchise.