Under the Healthsource Chiropractic franchise agreement, are franchisees responsible for indemnifying the franchisor against sales, use, excise, income, gross receipts, property, or other taxes levied against the franchisee or the franchisor in connection with the franchisee's business?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the existence of such insurance, you are and will be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Franchise, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom; and you agree to defend, indemnify and hold us harmless of, from, and with respect to any such claims, loss or damage, which indemnity shall survive the termination or expiration and non-renewal of this Agreement.
- h. In addition to the requirements of the foregoing paragraphs of this Paragraph 10.8, you must maintain any and all insurance coverage in such amounts and under such terms and conditions as may be required in connection with your lease or purchase of the Premises.
- i. The insurance HealthSource Chiropractic requires is for its own protection. You should consult with your own insurance agents, brokers, and attorneys to determine what types of coverages and what level of insurance protection you may need or desire, in addition to the coverages and minimum limits specified by HealthSource Chiropractic. Your obligation to maintain insurance coverage as described in this Agreement will not be reduced in any manner by reason of any separate insurance we maintain on our own behalf, nor will our maintenance of that insurance relieve you of any obligations under this Agreement.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, franchisees are responsible for indemnifying the franchisor against certain losses, damages, and liabilities. Specifically, the franchisee is responsible for any loss, damage, or contractual liability to third parties that originates from or is connected with the operation of the franchise. This includes claims or demands for damages to property, or for injury, illness, or death of persons that directly or indirectly result from the franchise's operations.
This means that if a customer or other third party sues Healthsource Chiropractic due to something that happened at the franchisee's location, the franchisee is responsible for defending, indemnifying, and holding Healthsource Chiropractic harmless from those claims. This obligation survives even after the franchise agreement terminates, expires, or is not renewed.
Healthsource Chiropractic also requires franchisees to maintain insurance coverage, but this insurance is primarily for Healthsource Chiropractic's protection. Franchisees are advised to consult with their own insurance agents, brokers, and attorneys to determine what additional coverage and protection they may need or desire beyond what Healthsource Chiropractic specifies. The franchisee's obligation to maintain insurance is not reduced by any separate insurance that Healthsource Chiropractic maintains, nor does Healthsource Chiropractic's insurance relieve the franchisee of their obligations under the agreement.
However, the FDD excerpt does not specifically state that franchisees must indemnify Healthsource Chiropractic for specific taxes such as sales, use, excise, income, gross receipts, or property taxes. A prospective franchisee should clarify with Healthsource Chiropractic whether the general indemnification clause extends to these specific types of taxes or if there are other provisions addressing tax liabilities.