Can a Brightstar Care franchisee own or operate a business providing supplemental healthcare staff to hospitals during the Initial Term?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree that you will receive valuable training, goodwill, and Confidential Information that you otherwise would not receive or have access to but for the rights licensed under this Agreement. You therefore agree to the following non-competition covenants:
11.4.1 You covenant that during the Initial Term you will not (a) divert or attempt to divert any business, client, or potential client of the Agency or any other BrightStar Care Agency to any competitor, by direct or indirect inducement or otherwise; (b) perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Licensed Marks or the BrightStar Care Agency Program; or (c) make, or authorize or direct any other person to make, any written or oral statement, or take any action, that disparages us, our affiliates, any of our respective owners, directors, or officers, or the BrightStar Care Agency Program, provided, however, that nothing in this Section 11.4.1 or elsewhere in this Agreement restricts or is intended to restrict your communications with any state or federal law regulator or enforcement authority about potential violations of law.
11.4.2 You covenant during the Initial Term not directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or entity, to own, manage, operate, maintain, engage in, consult with or have any interest in any business, other than the one authorized by this Agreement or any other agreement between you and us, that would be considered a Competing Business. For purposes of this Section 11.4, a "Competing Business" is any business that provides (a) supplemental healthcare staff to institutional clients, such as hospitals, Medicare agencies, hospice agencies, assisted-living centers, nursing homes and clinics; (b) homecare services—whether comprehensive care services (including medical and non-medical care services), solely non-medical care services, or solely medical care services—to private-duty clients within their home or residence (the reference to "private-duty clients" means clients who receive care in their homes or other places of residence regardless of the nature of the payor for such care (e.g., a private individual, long-term care, commercial insurance, National Accounts payor, Medicare Advantage, Medicaid, etc.)); (c) case management and care management services; and/or
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, during the Initial Term of the franchise agreement, franchisees are restricted from engaging in any business that would be considered a Competing Business. A "Competing Business" is defined as any business that provides supplemental healthcare staff to institutional clients, such as hospitals, Medicare agencies, hospice agencies, assisted-living centers, nursing homes, and clinics.
This means that a Brightstar Care franchisee is prohibited from owning, managing, operating, maintaining, engaging in, consulting with, or having any interest in a business that provides supplemental healthcare staff to hospitals or other institutional clients during the Initial Term. This restriction applies whether the franchisee is directly or indirectly involved in the competing business, either for themselves or through another person or entity.
The FDD specifies that franchisees receive valuable training, goodwill, and confidential information, justifying the non-competition covenants. These covenants aim to protect Brightstar Care's brand and market position by preventing franchisees from using the franchisor's resources and knowledge to compete against the Brightstar Care system during the term of the agreement. This type of restriction is common in franchising to protect the brand and prevent franchisees from directly competing with the franchise system.
Therefore, a prospective Brightstar Care franchisee should understand that they cannot operate a separate business providing supplemental healthcare staff to hospitals or similar institutions during the Initial Term of their franchise agreement. Violating this non-compete clause could have legal and financial repercussions, including potential termination of the franchise agreement.