factual

What obligations does a HealthSource Chiropractic franchise owner have to HealthSource Chiropractic upon termination or expiration of the franchise?

Healthsource_Chiropractic Franchise · 2025 FDD

Answer from 2025 FDD Document

wledge and agree that, should we choose to withhold performance rather than terminate this Agreement, HealthSource Chiropractic's failure to exercise its right to terminate this Agreement will in no way constitute a waiver of its subsequent right to terminate this Agreement for the specified default or for any other default or to exercise any other remedies available to us under this Agreement, at law, or in equity.

16. RIGHTS AND OBLIGATIONS OF COMPANY AND FRANCHISE OWNER UPON TERMINATION OR EXPIRATION OF THE FRANCHISE.

16.1 Payment of Amounts Owed to HealthSource Chiropractic. You agree to pay us within five (5) days after the effective date of termination or expiration of the Franchise, or any later date that the amounts due to us are determined, all amounts owed to us or our affiliates which are then unpaid including, without limitation, any unpaid Initial Franchise Fee, any unpaid

Continuing Franchise Fees, and any termination fee, damages, costs or expenses owed by you pursuant to Section 15.3, together with any audit costs and expenses owed by you pursuant to Section 13.2.

  • 16.2 Marks. Use of the Marks and Copyrightable Works after the termination or expiration of the Clinic Franchise will constitute the unlawful use of our intellectual property rights, which include trademarks and service marks. You agree that after the termination or expiration of the Franchise you will:
  • a. not directly or indirectly at any time identify any business with which you are associated as a current or former HealthSource Chiropractic franchise or franchisee;
  • b. not use any Mark, any colorable imitation of any Mark, or any Copyrightable Worksin any manner or for any purpose, or use for any purpose any trademark or other commercial symbol that suggests or indicates an association with us;
  • c. return to us or destroy (whichever we specify) all customer lists, forms and materials containing any Mark or any Copyrightable Works or otherwise relating to a HealthSource Chiropractic franchise;
  • d. remove all Marks affixed to uniforms or, at our direction, cease to use those uniforms; and
  • e. take any action that may be required to cancel all fictitious or assumed name or equivalent registrations relating to your use of any Mark.

You irrevocably appoint HealthSource Chiropractic your attorney-in-fact to take the actions described in this paragraph if you do not do so yourself within 10 days after termination of this Agreement.

16.3 De-Identification. If you retain possession of the Premises, you agree to completely remove or modify, at your sole expense, any part of the interior and exterior decor that we deem necessary to disassociate the Premises with the image of a HealthSource Chiropractic franchise, including any signage, posters, furniture, equipment, products, or display units bearing the Marks. If you do not take the actions we request within 10 days after notice from us, we have the right to enter the Premises and make the required changes at your expense, and you agree to reimburse us for those expenses on demand. You irrevocably appoint HealthSource Chiropractic your attorney-in-fact to take the actions described in this paragraph if you do not do so yourself within 10 days after termination of this Agreement.

  • 16.4 Confidential Information. 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.
  • 16.5 Other Actions. Upon termination of this Agreement for any reason, and in addition to any other provisions contained in this Agreement, the parties will have the following further rights and obligations:
  • a. You must promptly execute any documents and take any steps that in the judgment of HealthSource Chiropractic are necessary to delete your listings from classified telephone directories and on-line listings, disconnect, or, at HealthSource Chiropractic's option, assign to it all telephone numbers that have been used in your Franchised Business, assign to HealthSource Chiropractic any URLs, domain names, and social media and social networking names that you have used in connection with your Franchised Business, and terminate all other references that indicate you are or ever were affiliated with HealthSource Chiropractic. By signing this Agreement, you irrevocably appoint HealthSource Chiropractic your attorney-in-fact to take the actions described in this paragraph if you do not do so yourself within 10 days after termination of this Agreement. If HealthSource Chiropractic chooses not to have you assign the telephone numbers to it, you may not assign the telephone number to any competitive business, use automatic forwarding to the telephone number of any competitive business, or otherwise make the telephone number directly or indirectly available to any competitive business.
  • b. Your Principal Owners and General Manager must immediately comply with the restrictive covenants set forth in this Agreement and any Restrictive Covenants Agreement signed by your General Manager, as applicable.
  • c. You must give HealthSource Chiropractic a final accounting for your Franchised Business, and you must maintain all accounts and records for your Franchised Business for a period of not less than seven years after final payment of any amounts you owe to HealthSource Chiropractic, its affiliates, and/or related persons when this Agreement is terminated, but you may not sell, disclose, or otherwise transfer any of the information contained in those accounts and

records (other than patient records needed for their continuing care) to, or for use by, any competitive business.

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

What This Means (2025 FDD)

According to the 2025 HealthSource Chiropractic Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee has several obligations to HealthSource Chiropractic. Within five days of termination or expiration, the franchisee must pay all outstanding amounts owed to HealthSource Chiropractic, including unpaid franchise fees, termination fees, damages, costs, and audit expenses.

The franchisee is prohibited from using HealthSource Chiropractic's trademarks, service marks, and copyrighted materials. They cannot identify any business as a current or former HealthSource Chiropractic franchise and must return or destroy all customer lists, forms, and materials containing HealthSource Chiropractic's marks. Franchisees must also remove all HealthSource Chiropractic marks from uniforms and take action to cancel any registrations related to the use of HealthSource Chiropractic's marks. HealthSource Chiropractic is appointed as the attorney-in-fact to carry out these actions if the franchisee fails to do so within 10 days of termination.

Furthermore, the franchisee must remove or modify any interior and exterior decor that associates the premises with HealthSource Chiropractic. If the franchisee does not comply within 10 days of notice, HealthSource Chiropractic has the right to enter the premises and make the changes at the franchisee's expense. The franchisee must also cease using any confidential information and return all copies of the operations manual and confidential materials. The franchisee must also promptly execute documents to delete listings from directories and online listings, disconnect or assign telephone numbers and URLs to HealthSource Chiropractic, and terminate any references indicating affiliation with HealthSource Chiropractic. The franchisee's Principal Owners and General Manager must comply with restrictive covenants, and the franchisee must provide a final accounting and maintain records for seven years, without disclosing the information to any competitive business.

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.