For Brightstar Care franchises, are there any circumstances under which a franchisee can use an alternative supplier for payroll services?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
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. Despite these procedures, we may refuse your requests for any reason, including because we believe that doing so is in the best interests of the BrightStar Care network.
In our fiscal year ending December 29, 2024, we derived no revenue from direct franchisee purchases from us. We also did not derive payments from third party-vendor rebates. Based on its internal records, during the year ended December 29, 2024, our affiliate, BrightStar Technology Group, LLC, derived revenue in the amount of $5,432,681 from required franchisee purchases. None of our other affiliates derived revenue from any franchisee purchases or leases.
You must pay the then-current price for the items you purchase from us or our affiliate. In some instances, the cost for the items you purchase from us or our affiliate may be higher than the cost of other similar supplies and products on the market.
We estimate that the costs of your purchases from designated or approved sources, or according to our standards and specifications, are approximately 91% of the total cost of establishing your Agency and approximately 83% of the total cost of operating your Agency (excluding field staff costs) after that time.
Leases
If you are leasing the Agency's Premises, you and the landlord must sign the Collateral Assignment of Lease, or a comparable document, a copy of which is attached to the Franchise Agreement as Exhibit "C." This document gives us the option to assume your lease if the Franchise Agreement expires or terminates for any reason.
If your affiliate intends to purchase real estate as the Premises where the Agency will operate, you and your affiliate must adhere to the same requirements and review process as outlined in the Franchise Agreement and Operations Manual. You may not own the site from which you plan to operate the Agency. You must lease the site from a third party, whether or not affiliated with you. If your affiliate owns the site, you must execute a separate lease with that affiliate governing the terms of your possession and occupancy of the premises.
ITEM 9 FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 41–44)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, franchisees have the option to request permission to use an alternative vendor for payroll services. However, Brightstar Care requires franchisees to use designated suppliers for various services, including payroll, unless an exception is granted. If a franchisee wishes to use an alternative payroll service, they must submit a written request to Brightstar Care.
The written request must include a description of the services the alternative vendor would provide and the associated costs, if known. Brightstar Care will then evaluate the request based on factors relating to the vendor and the uniformity, efficiency, and quality of operations deemed necessary for the BrightStar Care franchise program. Brightstar Care is not obligated to approve any particular vendor and may refuse requests for any reason if it believes doing so is in the best interest of the BrightStar Care network.
Brightstar Care will notify the franchisee in writing of its decision within 30 days after receiving all the required information. If the request is approved, the franchisee can use the alternative vendor's payroll software and will not be required to use ABS's payroll-related functions. However, Brightstar Care retains the right to revoke its approval if the vendor no longer meets its standards, and the franchisee must cease using the vendor upon written notice of revocation. Franchisees must use the approved alternative vendor solely for the Brightstar Care Agency's operation and not for any competitive business purpose.
It is important to note that Brightstar Care can charge a fee for evaluating a proposed supplier. While the document mentions a general evaluation fee of up to $5,000 for unapproved suppliers, it specifies a minimum fee of $2,500 if the vendor requires access to any of Brightstar Care's technology platforms. This fee covers a third-party risk assessment and is due regardless of whether the supplier is ultimately approved. This policy ensures that Brightstar Care maintains control over key aspects of the business while allowing some flexibility for franchisees to seek alternative solutions under specific conditions.