What consideration does Brightstar Care receive for granting rights under the 2025 Franchise Agreement?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
N OPTION AGREEMENT**
EXPANSION OPTION AGREEMENT
| over time at the greater of the actual GMF fees earned or the contract monthly minimum each | |||||||
|---|---|---|---|---|---|---|---|
| month, and marketing expenses are recognized when incurred within the Company’s consolidated | |||||||
| statements of income. | GMF income | was | $13,476,528 | and | $12,833,485 | for the | years ended |
| December 31, 2023 and January 1, 2023, respectively, | and is included | within the consolidated | |||||
| statements of income. | 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 enter into a BrightStar Franchising, LLC Agency franchise agreement for the Expansion Territory during the Option Period, then BrightStar will credit the Expansion Option Fee you paid BrightStar toward the Initial Franchise Fee payable under the BrightStar Franchising, LLC Agency franchise agreement for the Expansion Territory.
Source: Item 23 — RECEIPTS (FDD pages 118–387)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, Brightstar Care grants an option to acquire the right to open and operate an additional Brightstar Care Agency in an Expansion Territory. In return, Brightstar Care receives an Expansion Option Fee of $10,000. Brightstar Care agrees not to 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.
The Expansion Option Fee is due in full when the agreement is signed and is considered fully earned by Brightstar Care upon payment. This fee is non-refundable under any circumstances, even if the expansion option lapses. However, 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.
The option must be exercised within one year following the opening of the initial agency. Brightstar Care may extend this Option Period at its discretion if the franchisee is making sufficient progress toward meeting the requirements to exercise the expansion option. To exercise the expansion option, the franchisee must meet Brightstar Care's expansion policy requirements, be in full compliance with all existing agreements, not be in default of any agreement, have satisfied all monetary obligations, and have a Franchise Agreement in full force and effect.