Is the $10,000 Expansion Option Fee for Brightstar Care refundable, and under what circumstances?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
| GMF expense | was | $12,493,237 | and | $12,572,362 | for the | years ended |
2. Grant of Expansion Option
Subject to the terms and conditions of this Agreement and the Franchise Agreement, BrightStar grants to you, and you accept, an option to acquire from BrightStar the right to open and operate an additional BrightStar Care Agency in the Expansion Territory. In consideration of your payment of the Expansion Option Fee (defined below), BrightStar agrees that it will not offer or sell the right to open and operate a BrightStar Care Agency in the Expansion Territory to any third party during the Option Period (defined below) of this Agreement.
3. Expansion Option Fee
In consideration for BrightStar granting the expansion option under this Agreement, you agree to pay BrightStar a fee equal to Ten Thousand Dollars ($10,000) (the "Expansion Option Fee"). This sum will be due in full when you sign this Agreement and will be considered fully earned by BrightStar when paid, in consideration of BrightStar granting you the expansion option. The Expansion Option Fee is not refundable in whole or in part under any circumstance, including if the expansion option granted to you under this Agreement lapses. However, if you exercise your option and ent
Source: Item 5 — INITIAL FEES (FDD pages 16–17)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, the $10,000 Expansion Option Fee is generally non-refundable. Specifically, the FDD states that the fee is not refundable in whole or in part under any circumstance, including if the expansion option granted to the franchisee lapses. This means that if a franchisee decides not to pursue the expansion, or if they fail to meet the conditions to exercise the expansion option within the specified Option Period, they will not receive a refund of the $10,000.
However, there is one exception to this non-refundability. If the franchisee exercises their option and enters into a BrightStar Franchising, LLC Agency franchise agreement for the Expansion Territory during the Option Period, Brightstar Care will credit the $10,000 Expansion Option Fee toward the Initial Franchise Fee payable under the new franchise agreement. In this case, the franchisee does not get a refund, but the money is applied to the fees required to open the additional Brightstar Care Agency.
In summary, while the Expansion Option Fee is non-refundable under most circumstances, it effectively becomes refundable in the form of a credit towards the Initial Franchise Fee if the franchisee proceeds with opening the additional Brightstar Care Agency within the Option Period. This provides an incentive for franchisees to expand their business with Brightstar Care, while also ensuring that Brightstar Care is compensated for granting the expansion option, regardless of whether the franchisee ultimately decides to exercise it.