When can either party terminate the Healthsource Chiropractic agreement immediately based on a legal opinion?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.2 Legal Requirements. In addition, if, in the opinion of our legal counsel, any provision of this Agreement is contrary to law, then this Agreement shall remain in full force and effect and you and we agree to negotiate in good faith an amendment that would make this Agreement conform to the applicable legal requirements. If you and we are unable to reach such an agreement within 30 days after notice of the issue is given to the other party, or if fundamental changes to this Agreement are required to make it conform to the legal requirements, then we reserve the right to terminate this Agreement upon notice to you, in which case neither party shall have any liability to the other but all of your post-termination obligations set forth in Section 16 shall apply.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, either party's ability to terminate the agreement immediately based on a legal opinion is limited. Specifically, if Healthsource Chiropractic's legal counsel determines that any provision of the agreement is contrary to law, both parties are obligated to negotiate an amendment in good faith to align the agreement with legal requirements.
However, if both parties cannot reach an agreement within 30 days after notice of the issue, or if fundamental changes are required to conform to legal requirements, Healthsource Chiropractic reserves the right to terminate the agreement. In this case, neither party will have any liability to the other, but the franchisee's post-termination obligations, as outlined in Section 16 of the agreement, will still apply.
This clause provides Healthsource Chiropractic with a mechanism to address legal conflicts that may arise during the franchise term. It also protects the franchisee by requiring a negotiation period before termination, unless fundamental changes are needed. However, the ultimate decision to terminate rests with Healthsource Chiropractic if a resolution cannot be reached or if changes are too extensive.