For Healthsource Chiropractic, what is the required minimum ownership interest for a Franchise Owner?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
s throughout the Term of this Agreement in all states in which you are required to qualify, that you have the authority to execute, deliver and carry out all of the terms of this Agreement, and that during the Term of this Agreement the only business you (i.e., the corporate, partnership or limited liability entity) will conduct will be the development, ownership and operation of the Franchise.
- 14.2 Interests in Franchise Owner; Reference to Exhibit 2. You and each Principal Owner represent, warrant, and agree that all "Interests" in Franchise Owner are owned in the amount and manner described in Exhibit 2. No Interests in Franchise Owner will, during the Term of this Agreement, be "public" securities (i.e., securities that require, for their issuance, registration with any state or federal authority). (An "Interest" is defined to mean any shares, units, membership interests, or partnership interests of Franchise Owner and any other equitable or legal right in any of Franchise Owner's stock, revenues, profits, rights, or assets. When referring to Franchise Owner's rights or assets, an "Interest" means this Agreement, Franchise Owner's rights under and interest in this Agreement, any HealthSource Chiropractic franchise, and the revenues, profits or assets of any HealthSource Chiropractic franchise.) You and each Principal Owner also represent, warrant, and agree that no Principal Owner's Interest has been given as security for any obligation (i.e., no one has a lien on or security interest in a Principal Owner's Interest), and that no change will be made in the ownership of an Interest other than as expressly permitted by this Agreement or as we may otherwise approve in writing. You and each Principal Owner agree to furnish us with such evidence as we may request from time to time to assure ourselves that the Interests of Franchise Owner and each of your Principal Owners remain as permitted by this Agreement, including a list of all persons or entities owning any Interest, as defined above.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
Based on the 2025 Healthsource Chiropractic Franchise Agreement, the specific minimum ownership interest required for a Franchise Owner is not explicitly detailed in the provided excerpts. However, the agreement emphasizes that all ownership interests in the Franchise Owner entity must be disclosed and maintained as described in Exhibit 2 of the agreement.
The agreement states that the franchisee and each Principal Owner must represent and warrant that all "Interests" in the Franchise Owner are owned in the amount and manner described in Exhibit 2. An "Interest" is defined broadly to include any shares, units, membership interests, or partnership interests in the Franchise Owner, as well as any equitable or legal right in the Franchise Owner's stock, revenues, profits, rights, or assets, including the Franchise Agreement itself.
Furthermore, the agreement restricts the transfer of any ownership interests without prior approval from Healthsource Chiropractic, ensuring that the Proposed New Owner meets the franchisor's standards for franchisees. The formal partnership, corporation, or other formation documents must reflect these transfer restrictions. Prospective franchisees should carefully review Exhibit 2 of the Franchise Agreement and consult with Healthsource Chiropractic to fully understand the required minimum ownership interest and any associated conditions or restrictions.