Does the non-competition agreement for Healthsource Chiropractic extend to the immediate family members of the franchise owner or principal owner?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
a. Non-Competition. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among HealthSource Chiropractic franchises, if franchise owners of HealthSource Chiropractic franchises were permitted to hold interests in any competitive businesses (as described below). Therefore, during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the
immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at HealthSource Chiropractic Clinic franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the non-competition agreement extends to immediate family members of the franchise owner or principal owner. Specifically, during the term of the agreement, neither the franchisee, any principal owner, nor any member of their immediate families can directly or indirectly perform services for or have any interest in businesses offering similar products or services to Healthsource Chiropractic clinics.
This restriction aims to protect Healthsource Chiropractic's confidential information and encourage the free exchange of ideas among franchisees. The definition of 'interest' is broad, covering various roles such as owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent. However, owning one percent or less of a publicly traded company is an exception to this restriction.
For a prospective franchisee, this means that their immediate family members are also restricted from participating in competitive businesses during the term of the franchise agreement. This could impact family members who are already involved in similar businesses or who may consider doing so in the future. It is important for potential franchisees to discuss these restrictions with their families and understand the implications before entering into a franchise agreement with Healthsource Chiropractic.