Does Healthsource Chiropractic have an obligation to enforce the Restrictive Covenant Agreement for the benefit of the franchisee?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
You further agree that you will cause each General Manager to enter into and deliver to us a Restrictive Covenant Agreement in such form as we may approve, either concurrently with the execution of this Agreement or at such later date when the affiliation of such person with you is established. You acknowledge and agree that we are under no duty or obligation to you to enforce any such Agreements for your or our benefit.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, Healthsource Chiropractic has no duty or obligation to enforce the Restrictive Covenant Agreement for the benefit of the franchisee. The agreement is put in place between the franchisee and their general manager.
This means that while Healthsource Chiropractic requires the franchisee's general managers to sign a Restrictive Covenant Agreement, the responsibility for enforcing this agreement rests solely with the franchisee. Healthsource Chiropractic is not obligated to take any action to ensure the general manager complies with the terms of the agreement.
This lack of obligation could pose a risk to the franchisee. If a general manager violates the Restrictive Covenant Agreement, the franchisee would need to pursue legal action independently to enforce the agreement. This could involve incurring legal fees and expending time and resources. A prospective franchisee should consider this potential burden and discuss with Healthsource Chiropractic what support or resources, if any, they might offer in such a situation, even if they are not legally obligated to enforce the agreement directly.