Under what circumstances can Healthsource Chiropractic terminate the Development Agreement without allowing the developer an opportunity to cure?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.2 Franchisor will have the right, at its option, to terminate this Agreement and all rights granted to Developer hereunder, without affording Developer any opportunity to cure such default, effective upon written notice to Developer, upon the occurrence of any of the following events: (i) if Developer ceases to actively engage in development activities in the Site Selection Area or otherwise abandons its development business for three consecutive months, or any shorter period that indicates an objective intent by Developer to discontinue development of the Clinics within the Site Selection Area; (ii) if Developer becomes insolvent or is adjudicated bankrupt, or if any action is taken by Developer, or by others against the Developer, under any insolvency, bankruptcy or reorganization act, or if Developer makes an assignment for the benefit of creditors or a receiver is appointed by the Developer; (iii) if Developer fails to meet its development obligations under the Development Schedule for any single Development Period, and fails to cure such default within 30 days of receiving notice thereof; and (iv) if any Franchise Agreement that is entered into in order to fulfill Developer's development obligations under this Agreement is terminated or subject to termination by Franchisor, pursuant to the terms of that Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to the 2025 Healthsource Chiropractic Franchise Disclosure Document, Healthsource Chiropractic can terminate the Development Agreement without providing an opportunity to cure under specific circumstances. These circumstances include if the developer ceases active engagement in development activities within the Site Selection Area for three consecutive months, or any shorter period that indicates an objective intent to discontinue development.
Additionally, Healthsource Chiropractic can terminate the agreement without an opportunity to cure if the developer becomes insolvent or is adjudicated bankrupt, or if any action is taken by the developer or others against the developer under any insolvency, bankruptcy, or reorganization act. This also applies if the developer makes an assignment for the benefit of creditors or a receiver is appointed by the developer.
Furthermore, Healthsource Chiropractic can terminate the agreement without an opportunity to cure if any Franchise Agreement entered into to fulfill the developer's obligations is terminated or subject to termination by Healthsource Chiropractic, according to the terms of that Franchise Agreement. However, if the developer fails to meet its development obligations under the Development Schedule for any single Development Period, Healthsource Chiropractic must provide the developer with 30 days' notice to cure the default before terminating the agreement.