What is Healthsource Chiropractic's policy on transfers of interest by principal owners to immediate family members?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
9.3 Non-Competition Agreement and Other Restrictive Covenants.
a. Non-Competition. You agree that we would be unable to protect the Confidential Information against unauthorized use or disclosure, and would be unable to encourage a free exchange of ideas and information among HealthSource Chiropractic franchises, if franchise owners of HealthSource Chiropractic franchises were permitted to hold interests in any competitive businesses (as described below). Therefore, during the Term of this Agreement, neither you, nor any Principal Owner, nor any member of your immediate family or of the
immediate family of any Principal Owner, shall directly or indirectly perform services for, or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at HealthSource Chiropractic Clinic franchises; provided, however, that the ownership of one percent (1%) or less of a publicly traded company will not be deemed to be prohibited by this Paragraph.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic FDD, transfers of interest by principal owners are restricted. Specifically, principal owners and their immediate family members are restricted from having any ownership in competitive businesses.
During the term of the agreement, neither the franchisee, any principal owner, nor any member of their immediate family can directly or indirectly perform services for or have any direct or indirect interest as an owner, investor, partner, director, officer, employee, manager, consultant, representative, or agent in, any business that offers products or services the same as or similar to those offered or sold at HealthSource Chiropractic Clinic franchises. However, owning one percent (1%) or less of a publicly traded company is an exception to this rule.
If a principal owner wishes to transfer their interest in the Healthsource Chiropractic franchise, they must apply to Healthsource Chiropractic for approval. The person or entity to whom the interest is being transferred must also apply for acceptance as a franchisee. Healthsource Chiropractic will evaluate the proposed transfer to confirm that all conditions are met. Healthsource Chiropractic will not unreasonably withhold approval of a transfer if the franchisee and principal owners are in full compliance with the agreement. The proposed new owner must also be of good moral character and meet Healthsource Chiropractic's standards for franchisees.