Is Healthsource Chiropractic obligated to enforce non-disclosure agreements for the benefit of the franchisee?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that on termination or expiration of the Franchise you will immediately cease to use any of the Confidential Information and agree not to use it in any business or for any other purpose.
You further agree that all non-disclosure and related covenants set forth in Section 9 above shall survive such termination or expiration and you will immediately return to us all copies of the Operations Manual and any written Confidential Information or other confidential materials that we have loaned or provided to you.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Healthsource Chiropractic emphasizes the importance of confidential information and requires franchisees to maintain its secrecy, but the document does not explicitly state that Healthsource Chiropractic is obligated to enforce non-disclosure agreements specifically for the benefit of the franchisee against other franchisees or third parties.
The FDD outlines in detail what constitutes Healthsource Chiropractic's confidential information, including services, sales data, product sources, advertising programs, operational methods, copyrighted materials, and training methods. Franchisees are required to protect this information and not use it for any purpose other than operating their franchise. Section 16.4 states that upon termination or expiration of the franchise agreement, the franchisee must immediately cease using any confidential information.
Section 9.3(a) includes a non-competition agreement that restricts franchisees and their immediate family members from having interests in competitive businesses during the term of the agreement. Section 16.6 further clarifies that the obligations regarding confidential information outlined in Article 9 survive the termination or expiration of the agreement. While these clauses protect Healthsource Chiropractic's proprietary information and restrict franchisees from engaging in competitive activities, they do not create an explicit obligation for Healthsource Chiropractic to enforce non-disclosure on behalf of one franchisee against another. A prospective franchisee should clarify with Healthsource Chiropractic the extent to which the franchisor will act to protect a franchisee's confidential information against actions by other franchisees or third parties.