What is the 'Protected Territory' in the context of a Healthsource Chiropractic franchise?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
Provided you are in full compliance with this Agreement, neither we nor our affiliates will operate or grant a franchise for the operation of another Clinic franchise physically located within the territory described in Exhibit 1 (the "Protected Territory").
You and we will mutually designate your Protected Territory upon or after the signing of this Agreement and Exhibit 1 shall be deemed to be automatically updated and revised to reflect such designation or any mutually agreed upon changes to your Protected Territory.
Except as otherwise provided in this Paragraph 2.3, we retain all rights with respect to Clinic franchises, the Marks and the System, including (by way of example only and not as a limitation): (a) the right to operate or grant others the right to operate Clinic franchises physically located outside the Protected Territory on terms and conditions we deem appropriate; (b) the right to operate or offer other healthcare-related companies or franchises or enter into other lines of business offering similar or dissimilar products or services under trademarks or service marks other than the Marks, both within or outside of the Protected Territory and to use other channels of distribution (for example, the internet, email, social media, telemarketing, or other direct marketing) in connection with such system(s) and/or location(s); (c) the right to sell or distribute, at retail or wholesale, directly or indirectly, or via the internet or any other means, or license others to sell or distribute, via any means (including the internet and other channels of distribution) any products that bear any propri
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the Protected Territory defines the geographic area where the franchisor agrees not to operate or grant another franchise for a Healthsource Chiropractic clinic, provided the franchisee remains in full compliance with the Franchise Agreement. This territory is described in Exhibit 1 of the agreement. The franchisee's right to operate is limited to the specific site or Premises designated for their franchise.
The Protected Territory is mutually designated by both the franchisee and Healthsource Chiropractic upon or after signing the Franchise Agreement. Exhibit 1 is then updated to reflect this designation or any mutually agreed-upon changes. This means the exact boundaries of the territory are not predetermined but are subject to negotiation and agreement between both parties.
Healthsource Chiropractic retains significant rights outside the Protected Territory. These rights include operating or franchising other clinics, offering other healthcare services under different trademarks, and utilizing various distribution channels like the internet or direct marketing. They also retain the right to sell or distribute products, or license others to do so, via any means, including the internet, even if those products bear proprietary marks. This reservation of rights highlights that the Protected Territory offers limited exclusivity, and Healthsource Chiropractic can still engage in various business activities that may indirectly compete with the franchisee outside of that specific area.