What constitutes a default of contractual obligations for Brightstar Care franchisees regarding Monthly Performance Standards?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be billed within 28 days of the end of each week for royalties. If you fail to meet any Monthly Performance Standard during the franchise term, you will be in default of your contractual obligations and will be billed, within 28 days of the end of each Monthly Performance period, an amount equal to the difference between the actual royalties you paid and the Minimum Monthly Royalty Payment (the "Minimum Monthly Royalty Fee"). The Minimum Monthly Royalty Payment is the royalty amount you must pay us on account of your operations during the previous month as though you had satisfied the Monthly Performance Standard for that month. You must pay us the Minimum Monthly Royalty Fee within 28 days from the invoice. We also have the right to terminate the Franchise Agreement if you fail to satisfy the Monthly Performance Standard more than 12 times during the franchise term (those 12 defaults need not occur in consecutive months), regardless of your payment of the Minimum Monthly Royalty Fee.
Source: Item 6 — OTHER FEES (FDD pages 17–34)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, a franchisee will be in default of their contractual obligations if they fail to meet any Monthly Performance Standard during the franchise term. This applies to franchisees operating in "standard" or "small" territories, as those in "Medium Density Market" territories do not have Monthly Performance Standards.
If a franchisee defaults by not meeting the Monthly Performance Standard, they will be billed a Minimum Monthly Royalty Fee. This fee is the difference between the royalties actually paid and the amount that would have been paid if the franchisee had met the Monthly Performance Standard for that month. The franchisee must pay this fee within 28 days of the invoice date.
Even if a franchisee pays the Minimum Monthly Royalty Fee, Brightstar Care has the right to terminate the Franchise Agreement if the franchisee fails to satisfy the Monthly Performance Standard more than 12 times during the franchise term. These 12 defaults do not need to occur in consecutive months. This policy highlights the importance Brightstar Care places on franchisees meeting their performance targets and the potential consequences of failing to do so, even if the financial obligations are met.