What are the Brightstar Care franchisee's obligations regarding approved suppliers (Item 8) and how does this relate to the initial investment costs (Item 7)?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
ector(s) of Nursing.
You must purchase all signs, uniforms, drug screening services, and medical supplies (where alternative sources of supply are unavailable) from us, designated suppliers or approved suppliers. You must offer services in the manner we prescribe, provide quality client service, and otherwise operate the Agency to enhance the image we intend for the BrightStar Care Agency Program, including the live answer for existing and prospective customers, employees, and applicant calls as outlined in the Operations Manual.
We formulate and modify our standards and specifications for products and services based upon marketplace and reimbursement changes, the collective experience of our franchisees and our company-owned locations, and our franchise support center personnel. We have the right to change our standards and specifications, including those for products, services, signs, and medical supplies, by written notice to you or through changes in the Operations Manual. You may incur an increased cost to comply with these changes at your own expense; however, no change will materially alter your fundamental rights under the Franchise Agreement. We will notify you of any change to our standards and specifications by way of electronic or written amendments to the Operations Manual or otherwise in writing.
If you wish to purchase from an unapproved supplier any item or service designated to be purchased only from an approved supplier, you may request our evaluation of a proposed supplier, a description of the item you wish to purchase, and purchase price of the item, if known. While we are not required to approve any particular supplier, we may base our approval of any proposed item or supplier on considerations relating to the item or supplier itself as well as to the uniformity, efficiency, and quality of operation we deem necessary or desirable for our BrightStar Care Agency Program as a whole. We will notify you in writing (via email or otherwise) of our approval or disapproval of a proposed supplier, product, or service within 30 days after receiving all requested information. We may charge you up to $5,000 for the evaluation if we ultimately approve the supplier. However, we will charge a minimum fee of $2,500 if the vendor, as part of its proposed scope of services, will need access to any of our technology platforms; this fee goes to pay a third party for its risk-assessment services and is due whether or not we approve the supplier. We may revoke our approval of particular products or suppliers when we determine they no longer meet our standards. Upon receipt of written notice of such revocation, you must cease purchasing products from such supplier. You must use products purchased from approved suppliers solely in connection with the Agency's operation and not for any competitive business purpose. Despite these procedures, we may limit the number of approved suppliers, designate sources you must use, and refuse your requests for any reason, including because we already have designated an exclusive source (which might be us or our affiliate) for a particular item or service or believe that doing so is in the best interests of the BrightStar Care network. One of our officers owns an interest in BrightStar Technology. Otherwise, no officer or director owns an interest in a designated supplier.
You may request in writing our permission to use an alternative vendor for payroll services. Your written request must include a description of the service(s) the alternative vendor would provide, and the cost(s) of the service(s), if known. While we are not required to approve any particular vendor, we may base our approval on considerations relating to the vendor itself as well as to the uniformity, efficiency, and quality of operation we deem necessary or desirable for our BrightStar Care Agency franchise program as a whole. We will notify you in writing (via email or otherwise) of our approval or disapproval of a proposed alternative payroll vendor within 30 days after receiving all requested information. If we grant your request, you will be allowed to use such vendor's payroll software and will not be required to use ABS's payroll-related functions. We may revoke our approval of the vendor when we determine it no longer meets our standards. Upon receipt of written notice of such revocation, you must cease purchasing payroll-related services from such vendor. You must use services purchased from approved alternative vendors solely in connection with the Agency's operation and not for any competitive business purpose.
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, franchisees are generally required to purchase signs, uniforms, drug screening services, and medical supplies from Brightstar Care, designated suppliers, or approved suppliers, especially where alternative sources are unavailable. Brightstar Care formulates and modifies standards and specifications for products and services based on marketplace and reimbursement changes, the collective experience of franchisees and company-owned locations, and franchise support center personnel. These standards and specifications, including those for products, services, signs, and medical supplies, can be changed with written notice or through updates to the Operations Manual, potentially increasing costs for the franchisee. However, these changes will not materially alter the franchisee's fundamental rights under the Franchise Agreement.
If a Brightstar Care franchisee wants to use an unapproved supplier for items or services that are designated to be purchased only from approved suppliers, they can request an evaluation of the proposed supplier. Brightstar Care may approve or disapprove the supplier based on considerations relating to the item or supplier, as well as the uniformity, efficiency, and quality of operation deemed necessary for the BrightStar Care Agency Program. Brightstar Care will notify the franchisee of their decision within 30 days of receiving all requested information. Brightstar Care may charge up to $5,000 for the evaluation if the supplier is approved. However, a minimum fee of $2,500 will be charged if the vendor needs access to any of Brightstar Care's technology platforms, regardless of whether the supplier is approved, to cover third-party risk assessment services. Brightstar Care can revoke approval of particular products or suppliers if they no longer meet standards, and franchisees must then cease purchasing from them.
The FDD indicates that the costs of purchases from designated or approved sources, or according to Brightstar Care's standards and specifications, are a significant portion of the franchisee's expenses. Specifically, these costs are estimated to be approximately 91% of the total cost of establishing the Agency and approximately 83% of the total cost of operating the Agency (excluding field staff costs) after that time. This highlights the importance of understanding and budgeting for these ongoing expenses when considering a Brightstar Care franchise. Franchisees should also be aware that the cost for items purchased from Brightstar Care or its affiliate may be higher than similar supplies and products on the market.
In the fiscal year ending December 29, 2024, Brightstar Care did not derive any revenue from direct franchisee purchases or third-party vendor rebates. However, its affiliate, BrightStar Technology Group, LLC, derived revenue of $5,432,681 from required franchisee purchases during the same period. This demonstrates the potential financial impact of required purchases from affiliated entities on the overall franchise system. Prospective franchisees should carefully evaluate these requirements and their potential costs as part of their due diligence process.