Before operating the Clinic Management Business, what agreement, in addition to the Franchise Agreement, must a Healthsource Chiropractic franchisee enter into?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
As further described below, to operate a Clinic Management Business, you must enter into a Franchise Agreement with us and a Management Agreement with a "PC" that will own and operate the Clinic. A "PC" will be one or more licensed individuals, or a professional corporation or similar entity, such as a professional limited liability company, that is duly authorized to provide chiropractic services under local and state laws. In such an arrangement:
- You, as franchisee, will construct or build-out the Clinic for use by the PC.
- The Clinic business will be operated by the PC using the HealthSource name and Marks.
- In addition to signing the Franchise Agreement with us, before you begin operating the Clinic Management Business, you must enter into a management agreement
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, a franchisee operating a Clinic Management Business must enter into a Management Agreement with a 'PC' (Professional Corporation) in addition to the Franchise Agreement. The 'PC' will own and operate the clinic and must be comprised of one or more licensed individuals or a professional corporation authorized to provide chiropractic services under local and state laws. This arrangement is necessary in states where non-licensed individuals are not permitted to own or operate chiropractic practices.
Under this structure, the franchisee, as the Clinic Management Business, is responsible for constructing or building out the clinic for use by the PC. The PC then operates the clinic business using the Healthsource Chiropractic name and marks. This division of responsibilities ensures compliance with state laws while allowing the franchisee to manage the business aspects of the clinic.
This requirement is significant for prospective franchisees as it dictates the operational structure and legal compliance necessary in certain states. It also highlights the importance of understanding local regulations regarding the ownership and operation of chiropractic practices. Franchisees should carefully review the Management Agreement and ensure they understand their responsibilities and the PC's role in operating the clinic.