What is included in the definition of 'gross revenues' for a Healthsource Chiropractic franchise?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
Recognizing the value of advertising to the goodwill and public image of Clinic franchises, we may, in our sole discretion, establish, maintain and administer an advertising fund (the "Ad Fund") for such advertising as we may deem necessary or appropriate in our sole discretion. You agree to contribute to the Ad Fund in the amount of two percent (2%) of the gross revenues of the Franchise.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
Based on the 2025 Healthsource Chiropractic Franchise Agreement, franchisees are required to contribute to the Ad Fund, which is calculated as two percent of the franchise's gross revenues. The agreement does not explicitly define 'gross revenues'.
Without a clear definition of 'gross revenues' in the provided documentation, prospective Healthsource Chiropractic franchisees face uncertainty regarding the basis for calculating advertising fees. This lack of clarity could lead to disputes over fee calculations and impact the franchisee's financial planning.
It is common practice for franchise agreements to define 'gross revenues' clearly to avoid ambiguity. A prospective Healthsource Chiropractic franchisee should seek clarification from the franchisor regarding the specific inclusions and exclusions in the calculation of gross revenues. Understanding this definition is crucial for accurate financial forecasting and compliance with the franchise agreement.