How does Brightstar Care account for leases that have a term of 12 months or less at the commencement date?

According to Brightstar Care's 2025 Franchise Disclosure Document, leases with a term of 12 months or less at the commencement date are treated differently than longer-term leases for accounting purposes. Specifically, Brightstar Care expenses these short-term leases on a straight-line basis over the lease term. This means the lease expense is recognized evenly throughout the duration of the lease.

Unlike leases with terms longer than 12 months, Brightstar Care does not recognize a Right-of-Use (ROU) asset or lease liability for these short-term leases. ROU assets represent the right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. By not recognizing these for short-term leases, Brightstar Care simplifies the accounting process for these agreements.

For a prospective Brightstar Care franchisee, this accounting treatment means that the financial impact of short-term leases will be reflected as a regular expense in the profit and loss statement, without the added complexity of asset and liability recognition on the balance sheet. This can make financial management and analysis simpler for franchisees dealing with short-term property leases.