What is the Brightstar Care franchisee's obligation regarding transitioning staffing business to a new franchisee?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
when the area is granted to another franchisee, you may, in our sole discretion, retain the existing clients being serviced in the area (excluding staffing contracts, which must be transferred to the new franchisee as soon as it is, in our opinion, operationally capable), as described in our then-current Cross-Territorial Policy as outlined in the Operations Manual.
A violation of the Cross-Territorial Policy is a default and potential grounds for termination of the Franchise Agreement. We have a Cross-Territorial Policy in our Operations Manual, which may be amended from time to time, which includes provisions for financial penalties in addition to, or in lieu of, termination of the Franchise Agreement following a violation of the Cross-Territorial Policy. You are responsible (rather than us) for any payments or penalties owed to franchisees for violations of the Cross-Territorial Policy. The Cross-Territorial Policy is now part of our system standards.
Source: Item 12 — TERRITORY (FDD pages 67–75)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, a franchisee may be required to transfer staffing contracts to a new franchisee under certain conditions. Specifically, if a Brightstar Care franchisee is servicing clients in an area that is later granted to a new franchisee, the existing clients may be retained at Brightstar Care's discretion, but staffing contracts must be transferred to the new franchisee. This transfer is contingent upon Brightstar Care's assessment of the new franchisee's operational capability.
The specifics of this process are detailed in Brightstar Care's Cross-Territorial Policy, which is outlined in the Operations Manual. This policy includes provisions for financial penalties if a franchisee violates it, potentially leading to termination of the Franchise Agreement. The franchisee is responsible for any payments or penalties owed to other franchisees due to violations of this policy.
This policy is considered a standard within the Brightstar Care franchise system, and violations can result in default and potential termination of the Franchise Agreement. The Cross-Territorial Policy may be amended from time to time. Prospective franchisees should carefully review the Operations Manual and understand the Cross-Territorial Policy to avoid potential penalties or termination of their franchise agreement.