Is a Brightstar Care franchisee prohibited from providing supplemental healthcare staff to hospitals, according to the non-competition covenant?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this Section 14.3, "Similar Business" means any business that provides: (1) supplemental healthcare staff to institutional clients, such as hospitals, Medicare agencies, hospice agencies, assistedliving centers, nursing homes and clinics; (2) 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, Medicaid, etc.)); (c) case management and care management services; and/or (d) any other services, technology or devices, or products we may now or in the future authorize you to offer or sell in connection with the Agency's operation. The obligations described above are in addition to your other post-term obligations in this Agreement described in Sections 14.1 and 14.2. The nonsolicitation restrictions above are in lieu of your post-term non-competition obligations under Sections 11.4.3 and 11.4.4 of this Agreement.
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, a franchisee is restricted from operating a "Similar Business" during the term of the franchise agreement. The definition of "Similar Business" includes providing supplemental healthcare staff to institutional clients such as hospitals. This means that while operating a Brightstar Care franchise, a franchisee cannot independently offer staffing services to hospitals or similar institutions.
This restriction is part of Brightstar Care's effort to protect its business model and market share. By preventing franchisees from engaging in similar businesses, Brightstar Care aims to maintain a clear separation between the services offered by its franchisees and other healthcare providers. This non-compete agreement ensures that franchisees focus on growing the Brightstar Care business within their designated territory without diverting resources or expertise to competing ventures.
For a prospective franchisee, this non-competition covenant is a significant consideration. It limits the franchisee's ability to diversify their business interests within the healthcare sector during the term of the franchise agreement. However, it also provides a degree of protection, as other franchisees are similarly restricted, preventing direct competition within the Brightstar Care network. Franchisees should carefully evaluate this restriction and its potential impact on their long-term business plans and revenue streams.