factual

Does the lien granted to Healthsource Chiropractic under the Healthsource Chiropractic Agreement extend to general intangibles of the Franchise?

Healthsource_Chiropractic Franchise · 2025 FDD

Answer from 2025 FDD Document

To secure your performance under this Agreement and indebtedness for all sums due us or our affiliates, we shall have a lien upon, and you hereby grant us a security interest in, the following collateral and any and all additions, accessions, and substitutions to or for it and the proceeds from all of the same: (a) all inventory now owned or after-acquired by the Franchise, including but not limited to all inventory and supplies transferred to or acquired by you in connection with this Agreement; (b) all accounts of the Franchise now existing or subsequently arising, together with all interest in the Franchise, now existing or subsequently arising, together with all chattel paper, documents, and instruments relating to such accounts; (c) all contract rights of the Franchise, now existing or subsequently arising including, without limitation, accounts receivable and other contractual rights to payment from others; (d) all general intangibles of the Franchise, now owned or existing, or after-acquired or subsequently arising including, without limitation, all awards, damages, payments, escrowed monies, insurance proceeds, and interest, fees, charges or payments accruing on or received from or to be received on any of the foregoing in any way; and (e) all products, proceeds, substitutions, and replacements of any of the above described collateral.

You agree to execute such financing statements, instruments, and other documents, in a form satisfactory to us, that we deem necessary so that we may establish and maintain a valid security interest in and to these assets, and you authorize us to file, without your signature, such financing statements as we shall deem necessary or advisable to reflect the security interest granted herein.

Source: Item 23 — Receipts (FDD pages 77–282)

What This Means (2025 FDD)

According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the lien they hold extends to the general intangibles of the franchise. Healthsource Chiropractic secures the franchisee's performance and indebtedness by establishing a lien upon specific collateral.

This collateral includes all inventory owned or acquired by the franchise, accounts, chattel paper, documents, and instruments related to these accounts. It also encompasses all contract rights, including accounts receivable and other contractual rights to payment. Critically, the lien extends to all general intangibles of the franchise, covering awards, damages, payments, escrowed monies, insurance proceeds, and any interest, fees, charges, or payments accruing from the aforementioned assets.

This means that Healthsource Chiropractic has a security interest in a broad range of the franchisee's assets, which could be used to satisfy any debts owed to Healthsource Chiropractic or its affiliates. The franchisee is obligated to execute financing statements and other documents to ensure Healthsource Chiropractic can establish and maintain this security interest. Healthsource Chiropractic is also authorized to file these statements without the franchisee's signature, if deemed necessary.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.