Does the Brightstar Care franchise grant the right to develop an agency in a Protected Territory?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
mises, commitments and understandings contained herein, we and you hereby agree as follows:
1. GRANT OF FRANCHISE
1.1 Grant
We hereby grant to you, upon the express terms and conditions contained in this Agreement, and you hereby accept, a franchise for the right to establish and operate one BrightStar Care Agency under the System and Licensed Marks identified below in the protected territory described in Exhibit A to this Agreement (the "Protected Territory"). We have the right to supplement, improve or otherwise modify the BrightStar System from time to time, and you agree to comply with all changes which may include, without limitation, the offer and sale of new or different products or services as we may specify and the acceptance of new sources of reimbursement as we may specify. You must offer and sell all products and services we require in the BrightStar System and may not offer or sell any unauthorized products or services.
1.2 Operation of Franchise Limited to Territory; Incidental Advertising
Referral sources are not exclusive, and you may call on referral sources outside your Protected Territory with prior notification in writing to the franchisee that owns the territory in which you will be marketing. All clients serviced must be in your Protected Territory and cannot be clients with service addresses, or services performed, in another protected territory held under a franchise agreement. You may not do staffing business outside your Protected Territory without our prior express written permission. In order to be granted the right to solicit or service clients outside the Protected Territory, you must meet the following conditions:
- (a) The area in which you wish to provide service to clients is not included in another franchisee's protected territory or in a territory currently served by an Agency owned by us or our affiliate.
- (b) On a monthly basis, at least seventy-five percent (75%) of your total Net Billings is from (i) business within your Protected Territory (consisting of both non-National Accounts Net Billings and National Accounts Net Billings derived from business within your Protected Territory) plus (ii) National Accounts Net Billings derived from National Accounts business outside your Protected Territory.
- (c) You may not explicitly direct any advertising to clients outside the Protected Territory.
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, the franchise agreement does grant a franchisee the right to establish and operate a BrightStar Care Agency within a Protected Territory. The specific details of the territory are outlined in Exhibit A of the franchise agreement.
However, the agreement also stipulates conditions regarding the operation of the franchise within and outside the Protected Territory. Franchisees are allowed to solicit referral sources outside their territory, provided they notify the franchisee owning that territory in writing. All clients serviced must reside within the franchisee's Protected Territory, and staffing business outside the territory requires prior written permission from BrightStar Care.
BrightStar Care also retains certain rights within and outside the Protected Territory. They can establish or license others to establish franchised or company-owned agencies outside the Protected Territory, and even within it if the franchisee is in default. BrightStar Care can also allow franchisees to service clients in another franchisee's territory if the original franchisee lacks the necessary licensure or chooses not to provide services. Similarly, they can permit other franchisees or company-owned locations to service clients within a franchisee's Protected Territory under the same conditions.
These stipulations highlight the importance of understanding the terms and conditions of the franchise agreement, particularly regarding the Protected Territory and the franchisor's reserved rights. Prospective franchisees should carefully review Exhibit A to understand the exact boundaries of their Protected Territory and discuss any concerns with BrightStar Care before signing the agreement.