What acts did the Frasers allege Brightstar Care violated in their arbitration?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Cosmo Fraser and Adam Fraser vs. BrightStar Franchising, LLC, Shelly Sun, Thomas Gilday, Scott Oaks, et al. (American Arbitration Association Case No. 02-16-0005-0209, filed March 15, 2017). The Frasers, former franchisees who operated one BrightStar Care franchise in Georgia, filed this arbitration against us and certain of our then principal officers (among others). They alleged violation of the Illinois Consumer Fraud and Deceptive Practices Act, violation of the Illinois Franchise Disclosure Act, statutory fraud under Georgia law, common law fraud, and negligent representation in connection with the Frasers' acquisition of their franchise. The Frasers alleged that the defendants failed to disclose before granting the franchise that the franchised territory was not a "new" territory, previously operated by 2 different franchisees who allegedly had failed, and allegedly was smaller than most franchised territories we have granted and also allegedly misrepresented the financial performance for first-year franchisees. The Frasers sought rescission of the franchise agreement and rescissionary or compensatory damages in excess of $500,000, punitive damages, attorneys' fees and costs, and other relief. We settled the case on March 1, 2018, in order to avoid further legal proceedings. We paid the Frasers a total of $215,000, the parties exchanged mutual releases, and the case was dismissed with prejudice.
Source: Item 3 — LITIGATION (FDD pages 15–16)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, Cosmo and Adam Fraser, former franchisees, initiated an arbitration against Brightstar Franchising, LLC, and certain officers, alleging several violations related to their acquisition of a Brightstar Care franchise in Georgia.
The Frasers specifically claimed violations of the Illinois Consumer Fraud and Deceptive Practices Act, the Illinois Franchise Disclosure Act, statutory fraud under Georgia law, common law fraud, and negligent representation. These allegations stemmed from the Frasers' assertion that Brightstar Care failed to disclose critical information before granting the franchise.
According to the FDD, the undisclosed information included the fact that the franchised territory was not new, having been previously operated by two different franchisees who allegedly failed. They also alleged that the territory was smaller than most Brightstar Care franchised territories and that Brightstar Care misrepresented the financial performance of first-year franchisees. The Frasers sought rescission of the franchise agreement and damages exceeding $500,000, along with punitive damages, attorneys' fees, and costs. The case was settled on March 1, 2018, with Brightstar Care paying the Frasers $215,000 to avoid further legal proceedings.