Does the Brightstar Care Franchise Agreement allow a franchisee to terminate without cause?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The following language is added to the Franchise Agreement as new Section 14.3:
Upon our termination of this Agreement in compliance with its terms, your termination of this Agreement without cause in breach of this Agreement, or expiration of this Agreement (if we offer you the right to renew the franchise for the Franchised Business but you choose not to renew), we have the right (but no obligation), exercisable by giving you written notice before or within thirty (30) days after the effective date of termination or expiration, to purchase the Agency's business and related goodwill (other than any goodwill we already own). We have the unrestricted right to assign this purchase option to a third party (including an affiliate), which then will have the rights and obligations described in this Section 14.3. We (or our designee) are entitled to all customary representations, warranties, and indemnities in our purchase, including representations and warranties regarding ownership and condition of, and title to, assets; liens and encumbrances on assets; validity of contracts and liabilities affecting the assets, contingent or otherwise; and indemnities for all actions, events, and conditions that existed or occurred in connection with the Agency before the closing of the purchase. You also agree (at our option) to assign to us (or our designee) the lease for the Agency's premises or to enter into a sublease for the remainder of the lease term on the same terms (including renewal options) as the lease.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 81–92)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, the Franchise Agreement allows for termination without cause in certain circumstances. Specifically, a California Brightstar Care franchisee has the option to terminate the agreement without cause, which would be considered a breach of the agreement.
However, if a franchisee chooses not to renew the franchise when Brightstar Care offers the right to renew, this is also treated as a termination. In the event of either the franchisee's termination without cause (breaching the agreement) or the expiration of the agreement due to non-renewal, Brightstar Care retains the right, but not the obligation, to purchase the agency's business and related goodwill. This right is exercisable by providing written notice within thirty days of the termination or expiration date. Brightstar Care also has the right to assign this purchase option to a third party.
If Brightstar Care exercises its option to purchase the agency, the franchisee is obligated to provide customary representations, warranties, and indemnities. These include assurances regarding the ownership and condition of assets, the validity of contracts, and any liabilities affecting the assets. The franchisee must also agree to assign the agency's lease to Brightstar Care or enter into a sublease under the same terms as the original lease, at Brightstar Care's discretion. This clause ensures that Brightstar Care can maintain control over the agency's location and operations even after the franchise agreement is terminated.