When did Healthsource Chiropractic reorganize and convert to an LLC?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
This summary of significant accounting polices of HealthSource Chiropractic, LLC, formerly Healthsource Chiropractic, Inc. (the Company), is presented to assist in understanding the Company's financial statements. The financial statements and notes are the representation of the company's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
Business Activity
The Company is an Ohio Limited Liability Company located in Avon, Ohio and is in the business of selling chiropractic franchises. The Company began selling "HealthSource Chiropractic" franchises in 2006. The company sells franchises throughout the United States.
On March 11th, 2022 the shareholders of the Company each contributed 100% of their beneficial interest to ZCS Holdings, Inc. pursuant to a Plan of Reorganization and immediately elected to be treated as a Qualified Subchapter S Subsidiary (QSub). On March 15th, 2022 HealthSource Chiropractic, Inc. converted to HealthSource Chiropractic, LLC pursuant to state law. On March 20th, 2022, HealthSource Chiropractic, LLC issued Class B Units to a new member, FW-HES Holdings, LLC (Franworth). As a result, ZCS Holdings, Inc. has a direct interest of 70% while Franworth has a direct interest of 30%.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the company underwent a reorganization in March 2022. Specifically, on March 11, 2022, the shareholders contributed their beneficial interest to ZCS Holdings, Inc. and elected to be treated as a Qualified Subchapter S Subsidiary. Following this, on March 15, 2022, HealthSource Chiropractic, Inc. officially converted to HealthSource Chiropractic, LLC, in compliance with state law. Finally, on March 20, 2022, Class B Units were issued to FW-HES Holdings, LLC, resulting in ZCS Holdings, Inc. holding a 70% direct interest and Franworth holding a 30% direct interest in Healthsource Chiropractic.
For a prospective franchisee, this reorganization and conversion to an LLC structure has several implications. The change in ownership and unit allocation reflects the current ownership structure of Healthsource Chiropractic, which may influence the strategic direction and decision-making processes of the franchise system. The involvement of ZCS Holdings, Inc. and Franworth indicates potential access to resources, expertise, and support networks that could benefit franchisees.
Furthermore, the conversion to an LLC may offer certain legal and financial protections to Healthsource Chiropractic, such as limited liability, which could indirectly benefit franchisees by ensuring the stability and longevity of the franchise system. Understanding the ownership structure and the implications of the reorganization is crucial for franchisees to assess the long-term viability and support they can expect from Healthsource Chiropractic. This information provides transparency into the company's evolution and its current operational framework.