What is the Healthsource Chiropractic 'Initial Clinic' as defined in the development agreement?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- b. From time to time we grant to persons who meet our qualifications, franchises to own and operate a HealthSource Chiropractic Clinic in accordance with the System in a specified geographic territory. This Agreement is being presented to you because of the desire you have expressed to obtain the right to develop, own, and be franchised to operate a HealthSource Chiropractic Clinic (we refer to your HealthSource Chiropractic franchise hereinafter as the "Franchise" or the "Franchised Business"). You may purchase and operate your Franchise as a new, start-up Clinic (a "Start-up Clinic"), or may convert an existing chiropractic practice to a HealthSource Chiropractic Clinic (a "Conversion Clinic").
- c. In certain cases, where permitted by law, we may offer franchises to persons or legal entities that meet our qualifications but are not licensed to practice or provide chiropractic care, and are willing to undertake the investment and effort to own and operate a business that will manage a Start-Up or Conversion Clinic under the System; we refer to these businesses as "Clinic Management Businesses." For example, certain states do not permit non-licensed persons to own and/or operate chiropractic practices, but some states do. In states that do not permit non-licensed persons to own or operate chiropractic practices, a Clinic Management Business may be offered. In states that do permit non-licensed persons to own and operate chiropractic practices, a Clinic Management Business Franchise is not necessary, but may be offered by us under certain circumstances.
As further described below, to operate a Clinic Management Business, you must enter into a Franchise Agreement with us and a Management Agreement with a "PC" that will own and operate the Clinic. A "PC" will be one or more licensed individuals, or a professional corporation or similar entity, such as a professional limited liability company, that is duly authorized to provide chiropractic services under local and state laws. In such an arrangement:
- You, as franchisee, will construct or build-out the Clinic for use by the PC.
- The Clinic business will be operated by the PC using the HealthSource name and Marks.
- In addition to signing the Franchise Agreement with us, before you begin operating the Clinic Management Business, you must enter into a management agreement
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the agreement is presented to individuals expressing interest in obtaining the right to develop, own, and operate a HealthSource Chiropractic Clinic, referred to as the "Franchise" or the "Franchised Business." A franchisee can establish their franchise as either a new, start-up clinic (referred to as a "Start-up Clinic") or by converting an existing chiropractic practice into a HealthSource Chiropractic Clinic (referred to as a "Conversion Clinic").
In certain instances, Healthsource Chiropractic may offer franchises to individuals or entities that meet their qualifications but are not licensed to practice chiropractic care. These individuals must be willing to invest in and manage a Start-Up or Conversion Clinic under the Healthsource Chiropractic system. These businesses are referred to as "Clinic Management Businesses." The availability of Clinic Management Businesses depends on state laws, as some states do not permit non-licensed individuals to own or operate chiropractic practices. In states where non-licensed ownership is not allowed, a Clinic Management Business may be offered, while in states where it is permitted, a Clinic Management Business Franchise may be offered under specific circumstances.
To operate a Clinic Management Business, the franchisee must enter into a Franchise Agreement with Healthsource Chiropractic and a Management Agreement with a "PC" (Professional Corporation). The PC will consist of licensed individuals or a professional corporation authorized to provide chiropractic services under local and state laws. In this arrangement, the franchisee will construct or build out the Clinic for use by the PC, and the Clinic business will be operated by the PC using the HealthSource name and Marks. Before commencing operations, the franchisee must sign both the Franchise Agreement with Healthsource Chiropractic and a management agreement with the PC.