Under what condition will all rights granted to a franchisee under the Healthsource Chiropractic agreement immediately and automatically terminate?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.3 Our Remedies upon Termination. In the event that we terminate this Agreement under Section 15.1 or other applicable provisions of this Agreement, but excluding the circumstances described in Section 15.2, all rights granted to you under this Agreement shall immediately and automatically terminate and revert to us, and we shall be entitled, to recover from you any and all of the foregoing:
- a. in those states in which such termination fees are enforceable, to receive from you a termination fee in the amount equal to one-half (1/2) of our then-current initial franchise fee for new HealthSource Chiropractic Start-up Clinic franchises; and
- b. an amount equal to your average monthly Continuing Franchise Fee, Ad Fund contribution, and Technology Fee multiplied by the number of months remaining in the Term of this Agreement, discounted by a present value discount factor of five percent (5%) and any additional actual, economic, consequential and indirect damages incurred by us including, without limitation, the loss of future revenues (which we both agree include the expected amount of Continuing Franchise Fees, Ad Fund contributions, and Technology Fees payable by you for the remainder of the Term of this Agreement); and
- c. all costs and expenses, including attorneys' fees, incurred in connection with the termination, collection of the termination fee and/or damages, and audit fees and expenses.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, if Healthsource Chiropractic terminates the Franchise Agreement under Section 15.1 or other applicable provisions of the agreement, excluding circumstances described in Section 15.2, all rights granted to the franchisee under the agreement will immediately and automatically terminate and revert to Healthsource Chiropractic.
This means that a Healthsource Chiropractic franchisee's rights can be immediately terminated if the franchisor terminates the agreement due to franchisee default or other breaches, as outlined in Section 15.1 of the agreement. However, this immediate termination does not apply if the termination is due to legal requirements as described in Section 15.2.
This condition is significant for prospective franchisees because it highlights the importance of adhering to the terms and conditions of the franchise agreement. Failure to comply with the agreement can lead to immediate termination of all rights, potentially resulting in significant financial and operational disruptions for the franchisee. Franchisees should carefully review Section 15.1 and other relevant provisions to understand the specific circumstances that could trigger such a termination.