What actions must a franchisee take to cooperate with Brightstar Care to transition customers and employees to approved providers in order to potentially reduce termination damages?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything in this Section 14.2 to the contrary, upon occurrence of a catastrophic health-related event (i.e., your or your principal owner's death or terminal illness or disability that prevents you or your principal owner from operating the Agency (as reasonably determined by an independent third party such as a licensed doctor)), we may choose not to pursue the full measure of termination damages against you under this Section 14.2 if, despite good-faith efforts to transfer the franchise pursuant to Section 12.5, those efforts are unsuccessful and we then terminate this Agreement. We may, in our sole discretion, reduce the termination damages if you use good-faith efforts to effect a transfer pursuant to Section 12.5. Any reduced termination damages will be contingent upon (i) the franchise not selling within 12 months from the formal resale listing, (ii) your working cooperatively with us to transition all customers and employees to approved providers, (iii) you confirm that W-2s have been paid in advance, (iv) all other employee obligations have been fulfilled, and (v) no legal action has been initiated against us or our affiliates.
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, in the event of a catastrophic health-related event that prevents the franchisee from operating the agency, Brightstar Care may choose not to pursue the full measure of termination damages if good-faith efforts to transfer the franchise are unsuccessful. To potentially reduce termination damages, a franchisee must work cooperatively with Brightstar Care to transition all customers and employees to approved providers.
This reduction in termination damages is contingent upon several factors. First, the franchise must not be sold within 12 months from the formal resale listing. Second, the franchisee must confirm that all W-2s have been paid in advance and all other employee obligations have been fulfilled. Finally, no legal action can have been initiated against Brightstar Care or its affiliates.
This clause provides a degree of protection for franchisees facing severe personal hardship, but it is not guaranteed. Brightstar Care retains sole discretion over whether to reduce termination damages. The franchisee must demonstrate good-faith efforts to transfer the franchise and fulfill all obligations to employees and customers to be considered for reduced damages.