Under what grounds is the Developer prohibited from withholding payment to Healthsource Chiropractic or its affiliates?

According to Healthsource Chiropractic's 2025 Franchise Disclosure Document, a franchisee is not allowed to withhold payments of Continuing Franchise Fees or any other amounts owed to Healthsource Chiropractic or its affiliates based on alleged non-performance by Healthsource Chiropractic of its obligations under the Franchise Agreement. This means that even if a franchisee believes Healthsource Chiropractic is not fulfilling its duties, the franchisee is still obligated to make all required payments.

This clause protects Healthsource Chiropractic's revenue stream, ensuring that franchisees cannot unilaterally decide to withhold payments due to disputes over performance. However, it places a significant financial risk on the franchisee, who must continue to pay fees even if they believe they are not receiving the support or services promised by Healthsource Chiropractic.

This type of clause is relatively common in franchise agreements, as it aims to maintain financial stability for the franchisor. However, prospective franchisees should carefully consider this obligation and ensure they have sufficient financial resources to meet their payment obligations, regardless of any disputes that may arise. It is advisable to seek legal counsel to fully understand the implications of this provision and to explore potential remedies in case of non-performance by Healthsource Chiropractic.