Under a Healthsource Chiropractic Development Agreement, when is the Development Fee due?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
or in part under any circumstances.
Development Fee
If we grant you the right to open multiple Clinics under a Development Agreement, you must pay us a one-time Development Fee immediately upon execution of your Development Agreement. Your Development Fee will depend on the number of Clinics we grant you the right to open within the Site Selection Area and is calculated as follows:
| Development Fee | Number of Franchised Clinics | |---|---| | $ 110,000.00 | Two (2) Franchised Clinics | | $ 45,000 per unit | Three (3) to Five (5) Franchised Clinics | | $ 40,000 per unit | Six (6) to Nine (9) Franchised Clinics | | $ 35,000 per unit | Ten (10) or more Franchised Clinics | You will be required to enter into our then-current form of Franchise Agreement for each Clinic you wish to open under your Development Agreement, but you will not be required to pay any additional Initial Franchise Fee at the time you execute each of these Franchise Agreements. You will execute our current form of Franchise Agreement for the first Clinic we grant you the right to open within your Development Area concurrently with the Development Agreement (unless we agree otherwise in writing).
The Development Fee does not include the fee to purchase our optional programs with your franchise.
Source: Item 5 — Initial Fees (FDD pages 15–16)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, the Development Fee is due immediately upon the execution of the Development Agreement. This fee is a one-time payment that grants the franchisee the right to open multiple Healthsource Chiropractic clinics within a specific Site Selection Area. The exact amount of the Development Fee depends on the number of clinics the franchisee is authorized to open.
The Development Fee does not cover the cost of optional programs offered by Healthsource Chiropractic. It is also important to note that the Development Fee is fully earned by Healthsource Chiropractic upon payment and is non-refundable under any circumstances. However, the document mentions a VetFran program that offers a $5,000 discount on the Development Fee (or the Initial Franchise Fee for the first franchise) to qualifying veterans.
For franchisees entering into a Development Agreement, they will not be required to pay an additional Initial Franchise Fee when they execute a Franchise Agreement for each subsequent clinic they open. A Franchise Agreement for the first clinic in the Development Area is executed concurrently with the Development Agreement, unless otherwise agreed in writing. This structure is common in multi-unit franchising, where the Development Fee secures the rights to expand within a defined territory, while the ongoing franchise fees are typically associated with each individual location as it opens.
Prospective Healthsource Chiropractic franchisees should carefully consider the number of clinics they plan to open and the corresponding Development Fee, as this is a significant upfront investment. They should also inquire about eligibility for the VetFran discount and any potential alternative payment arrangements for the Initial Franchise Fee, although such arrangements are not guaranteed. Understanding the terms of the Development Agreement, including the scope of the Site Selection Area and the timeline for opening the clinics, is crucial for making an informed decision.