How does Brightstar Care allocate consideration between pre-opening services and the symbolic license?

According to Brightstar Care's 2025 Franchise Disclosure Document, the company allocates consideration between pre-opening services and the symbolic license based on their relative standalone selling prices. This means Brightstar Care determines the value of each service (pre-opening and the franchise license) independently and then allocates the initial franchise fee revenue proportionally based on these values.

For the pre-opening services, which primarily involve setup and training, Brightstar Care recognizes revenue over time as the services are performed. This is done using an input measure of progress, meaning revenue is recognized when the service is actually provided to the franchisee. This approach aligns revenue recognition with the delivery of the pre-opening services.

For the symbolic license, which represents the franchise rights, Brightstar Care also recognizes revenue over time. This is done using a straight-line (time-lapse) method, meaning the revenue is recognized evenly over the term of the franchise agreement. This approach reflects the continuous access and benefit the franchisee receives from the Brightstar Care franchise system throughout the agreement term. The renewal option also follows this pattern, with revenue recognized over the renewal term.