Does Healthsource Chiropractic have liability to any person or legal entity that is not a party to the agreement because of the agreement?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
at any time fail or refuse to maintain any insurance coverage required by us or to furnish satisfactory evidence thereof, then we, at our option and in addition to our other rights and remedies under this Agreement, may, but need not, obtain such insurance coverage on your behalf, and you shall reimburse us on demand for any costs or premiums paid or incurred by us.
Notwithstanding the existence of such insurance, you are and will be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Franchise, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom; and you agree to defend, indemnify and hold us harmless of, from, and with respect to any such claims, loss or damage, which indemnity shall survive the termination or expiration and non-renewal of this Agreement.
- h. In addition to the requirements of the foregoing paragraphs of this Paragraph 10.8, you must maintain any and all insurance coverage in such amounts and under such terms and conditions as may be required in connection with your lease or purchase of the Premises.
- i. The insurance HealthSource Chiropractic requires is for its own protection.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the franchisee is responsible for all loss, damage, and contractual liability to third persons originating from the operation of the franchise. This includes claims or demands for damages to property or for injury, illness, or death of persons resulting from the franchise's operation. The franchisee agrees to defend, indemnify, and hold Healthsource Chiropractic harmless from any such claims, loss, or damage, and this obligation survives the termination or expiration of the agreement.
Healthsource Chiropractic requires franchisees to maintain insurance coverage, but this is primarily for Healthsource Chiropractic's own protection. Franchisees are advised to consult with their own insurance agents, brokers, and attorneys to determine the types and levels of insurance protection they may need or desire, in addition to the minimum requirements specified by Healthsource Chiropractic. The franchisee's obligation to maintain insurance coverage is not reduced by any separate insurance that Healthsource Chiropractic maintains, nor does Healthsource Chiropractic's insurance relieve the franchisee of their obligations under the agreement.
This arrangement is typical in franchising, where franchisees generally bear the direct liability for their business operations. The franchisor aims to protect itself from legal claims arising from the franchisee's actions. Prospective franchisees should carefully assess their insurance needs and understand their indemnification obligations, as these can have significant financial implications.