Is the Healthsource Chiropractic Transfer Agreement included as an exhibit?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
This Agreement includes several exhibits, all of which are legally binding and are an integral part of the complete Franchise Agreement.
You have applied for a franchise to own and operate a HealthSource Chiropractic Clinic, and we have approved your application in reliance on all of the representations you made in that application. As a result, and subject to the provisions of this Agreement, we grant to you a Franchise to operate a Clinic offering all products, services, and proprietary programs of ours in accordance with all elements of the System, that we may require for HealthSource Chiropractic Clinics. You must operate the Franchise at a mutually agreeable site (the "Premises") to be identified after the signing of this Agreement, and to use the System and the Marks in the operation of that Franchise, for an "Initial Term" of 10 years. The Initial Term will begin on the Agreement Date, unless you are assuming the Franchise pursuant to a Transfer, in which case the length of the Initial Term shall be determined by the applicable Transfer Agreement.
If you propose to Transfer this Agreement, the Franchise or its assets, or any Interest, or if any of your Principal Owners proposes to Transfer a controlling Interest in you or make a Transfer that is one of a series of Transfers which taken together would constitute the Transfer of a controlling Interest in you, then you must apply to us for approval of such Transfer sign such forms and procedures as we have in effect at that time, the person or entity to whom you wish to make the Transfer ("Proposed New Owner") must apply to us for acceptance as a franchisee, and you must submit to us all of the information and documentation required for us to evaluate the proposed Transfer and to confirm that all of the conditions set forth in Section 14.5 below have been, or will be, satisfied.
Source: Item 22 — Contracts (FDD page 77)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, the franchise agreement includes several exhibits that are legally binding and an integral part of the complete Franchise Agreement. One such instance where a Transfer Agreement is referenced is in Section 2.1, which discusses the Initial Term of the franchise. It states that if a franchisee is assuming the franchise through a transfer, the length of the Initial Term will be determined by the applicable Transfer Agreement.
Additionally, Section 14.4(e) outlines the procedure for transferring the franchise agreement, the franchise itself, its assets, or any interest in it. If a franchisee or their Principal Owners propose a transfer, they must apply to Healthsource Chiropractic for approval and adhere to the forms and procedures in effect at that time. The person or entity to whom the transfer is proposed must also apply for acceptance as a franchisee, and all necessary information and documentation must be submitted to allow Healthsource Chiropractic to evaluate the proposed transfer and ensure that all conditions in Section 14.5 are met.
While the FDD mentions the existence and importance of a Transfer Agreement, it does not explicitly state that a copy of the Transfer Agreement form is included as an exhibit to the Franchise Agreement. A prospective franchisee should confirm with Healthsource Chiropractic whether a sample Transfer Agreement is provided as an exhibit for review.