B55/100FDD 2025
HealthSource Chiropractic — Litigation & Risk
Health & Wellness - Other · FDD Items 3, 4 & 5
Moderate — Review
2 cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
2
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
55 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
7(a) FOIA data · FY2020–present
SBA Loan Performance
Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.
Total 7(a) loans
110
Government-backed loans issued
Default rate
10.8%
vs <3% typical · system-wide
5-yr default rate
66.7%
Defaults
8 loans
Loans charged off or defaulted
Total loan volume
$24.3M
Avg loan size
$221K
Participating lenders
55
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
No
Franchisor can match any purchase offer when you try to sell
Governing law
Ohio
State whose law governs disputes — relevant if you're not based there
What drove the 55/100 rating
Risk Score Breakdown
- 01MINORStagnant unit growth (1.5% YoY) suggests market saturation or franchisee dissatisfaction
- 02HIGHLitigation history involving willful disclosure failures raises corporate governance and transparency concerns
- 03MEDNet income not disclosed in Item 19 — impossible to assess actual franchisee profitability despite $571,990 average revenue
- 04MINORHigh investment range ($115K–$618K) with unclear ROI creates significant downside risk
- 05MINOR7% royalty on gross revenues (not net) compounds burden during low-margin periods
- 06MINOR10-year term is lengthy commitment given lack of financial performance transparency
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.