Under the Healthsource Chiropractic agreement, is the license to use the premises considered a lease or sublease?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.1 Management Company hereby grants Licensed Provider a revocable, nonassignable license to use the Premises, and all fixtures, equipment, and furnishings located therein, during the Agreement Term. The license to use the Premises granted by this Section 4.1 is not a lease or sublease of the Premises and this Agreement shall not be interpreted to create a landlord and tenant relationship between Management Company (or the owner of the Premises) and Licensed Provider or to give Licensed Provider any right to continued use, possession or occupancy of the Premises, except to the extent expressly stated in this Agreement. This license shall be deemed to end automatically upon the termination of this Agreement. Licensed Provider shall use all fixtures, equipment and furnishings granted by this Section 4.1 in the manner in which they are intended and in compliance with all rules and requirements of Management Company and, if applicable, its landlord; provided, however, that in all cases Licensed Provider shall have the discretion and authority to use such fixtures, equipment and furnishings to provide Clinical Services only as deemed necessary or advisable by Licensed Provider in his/her discretion. Licensed Provider shall return to Management Company the Premises, fixtures, equipment, and furnishings in the same condition, reasonable wear and tear excepted, as they were in as of the date 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 license granted to the Licensed Provider to use the premises is explicitly not a lease or sublease. The agreement between the Management Company and the Licensed Provider does not establish a landlord-tenant relationship. The Licensed Provider's rights to use, possess, or occupy the premises are limited to what is expressly stated in the agreement, and the license automatically ends upon termination of the agreement.
This arrangement means that a Healthsource Chiropractic franchisee does not have the same rights and protections as a tenant under a typical lease agreement. The franchisee's right to use the premises is contingent upon the franchise agreement's terms and can be revoked if the agreement is terminated. This could create a risk for the franchisee, as they may lose the right to operate their business from the location if the franchise agreement is terminated, even if they have invested significantly in the location.
Prospective Healthsource Chiropractic franchisees should carefully consider this aspect of the agreement and understand the implications of not having a traditional lease. They should also evaluate the conditions under which the franchise agreement can be terminated and the potential impact on their business operations and investment. It would be prudent to seek legal counsel to fully understand the risks and obligations associated with this type of licensing arrangement.