Under what circumstances can Healthsource Chiropractic terminate the Development Agreement with cause?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | Section 6.1 | The term begins on the effective date and ends on the earlier of the date you open the last Clinic you are required to open under your Development Schedule or the expiration of your Development Schedule. |
| b. | Renewal or extension of the term | Not Applicable | Not Applicable |
| c. | Requirements for franchisee to renew or extend | Not Applicable | Not Applicable |
| d. | Termination by franchisee | Not Applicable | Franchisees may terminate the agreements under any grounds permitted by state law. |
| e. | Termination by franchisor without cause | Not Applicable | Not Applicable |
| f. | Termination by franchisor with cause | Section 6.2 | We may terminate your Development Agreement with cause as described in (g)-(h) of this Item 17 Chart. |
| g. | "Cause" defined – curable defaults | Section 6.2 | We may terminate the Development Agreement if you fail to meet your development obligations under the Development Agreement during the Development Period (including any monetary default) and you fail to cure such default within 30 days of receiving notice. |
| h. | "Cause" defined – non-curable defaults | Section 6.2 | We may terminate the Development Agreement if you cease to actively engage in development activities in the Site Selection Area or otherwise abandon your development business for three consecutive months, or any shorter period that indicates an intent |
| Provision | Section in Development Agreement | Summary |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 53–64)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the company can terminate the Development Agreement with cause under specific circumstances, as detailed in Section 6.2 of the agreement. These circumstances fall into two main categories: curable defaults and non-curable defaults.
For curable defaults, Healthsource Chiropractic may terminate the Development Agreement if the developer fails to meet their development obligations during the Development Period, including any monetary defaults. However, the developer has an opportunity to rectify the situation. Healthsource Chiropractic must provide a written notice of the default, and the developer has 30 days from receiving the notice to cure the default. If the developer successfully addresses the default within this 30-day period, Healthsource Chiropractic cannot terminate the agreement on those grounds.
In the case of non-curable defaults, Healthsource Chiropractic can terminate the Development Agreement immediately without providing an opportunity to cure. This includes situations where the developer ceases active engagement in development activities within the Site Selection Area or abandons the development business for three consecutive months (or a shorter period indicating an intent to discontinue development). Other non-curable defaults include the developer becoming insolvent or bankrupt, making an assignment for the benefit of creditors, or having a receiver appointed. Additionally, if any Franchise Agreement entered into to fulfill development obligations is terminated or subject to termination by Healthsource Chiropractic, this can also lead to termination of the Development Agreement.
Prospective Healthsource Chiropractic developers should carefully review Section 6.2 of the Development Agreement to fully understand the specific actions or inactions that could lead to termination. Understanding these conditions is crucial for maintaining a successful and compliant development relationship with Healthsource Chiropractic.