After a transfer of a Healthsource Chiropractic franchise, will the original franchisee still be subject to post-transfer/post-termination obligations?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the existence of such insurance, you are and will be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Franchise, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom; and you agree to defend, indemnify and hold us harmless of, from, and with respect to any such claims, loss or damage, which indemnity shall survive the termination or expiration and non-renewal of this Agreement.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, the original franchisee remains responsible for certain obligations even after transferring the franchise. Specifically, the franchisee is responsible for all loss, damage, and contractual liability to third parties originating from the operation of the franchise, as well as claims for damages to property, injury, illness, or death of persons resulting from the franchise's operation. This obligation to indemnify Healthsource Chiropractic survives the termination, expiration, or non-renewal of the agreement.
This means that even after a transfer, if a claim arises that is related to the franchisee's period of ownership, the former franchisee could be held liable. This is a significant consideration for anyone considering selling their Healthsource Chiropractic franchise, as they could face ongoing financial exposure for past actions or events. It is important to note that the FDD excerpt does not specify a time limit on this liability, suggesting it could potentially extend indefinitely.
Franchisees should consult with legal and insurance professionals to fully understand the scope of their potential post-transfer liabilities and how to mitigate these risks. This may involve negotiating specific terms in the transfer agreement or obtaining appropriate insurance coverage to protect against future claims arising from their prior ownership of the Healthsource Chiropractic franchise.