What is included in Brightstar Care's Item 19 regarding franchised agency resale transactions?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
red by other franchisees or by our affiliates and are now considered a second or subsequent agency.
This Item 19 also includes financial information for our franchised agency resale transactions, i.e., transferred agencies. From 2006 through 2018, the date of transfer was defined as the date on which the new franchisee secured its license to operate the agency in the same manner as the selling franchisee. Beginning in 2019, the definition of the date of transfer changed to be the date on which the new franchisee and the selling franchisee execute the asset purchase agreement and the new franchisee executes its franchise agreement, even though the assets might not yet have transferred
if the new franchisee has not yet received its license to operate the agency in the same manner as it had been operated by the selling franchisee. The information disclosed for resale transactions depends on the amount of the agency's weekly Revenue as of the date of transfer. Specifically, if the franchised agency's weekly Revenue immediately before the date of transfer was less than $15,000 per week, any Revenue earned by the agency before the date of transfer was not included in the information contained in this Item 19. In such situations, the Revenue reflected in this Item 19 includes Revenue earned by the new franchisee only since the date of transfer. If, however, at the date of transfer from the selling franchisee to the new franchisee the agency's weekly Revenue exceeded $15,000, the Revenue included in this Item 19 reflects all Revenue earned by the agency since the agency's Start Date.
Different Schedules throughout this Item 19 contain different data sets. Specifically, Tables A, B, and C include first franchised agencies only and, beginning in 2022, former first franchised agencies that were subsequently acquired by our affiliate or by larger franchisees. These 3 Tables only include agencies open for at least 12 months as of December 31, 2024. Tables D and E include all agencies, regardless of whether a first agency or an additional agency and regardless of the length of time open. Table F includes various disclosures, including columns noted as either for all agencies regardless of the length of time open or only for first agencies open at least 12 months. Table G includes all franchised and affiliate-owned agencies regardless of whether a first agency or an additional agency and regardless of the length of time open between October 1, 2002, and December 31, 2024.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 92–107)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, Item 19 includes financial information regarding franchised agency resale transactions, also known as transferred agencies. The FDD specifies that from 2006 through 2018, the transfer date was defined as when the new franchisee obtained their license to operate the agency similarly to the selling franchisee. Starting in 2019, the transfer date was redefined as the date when the new and selling franchisees execute the asset purchase agreement, and the new franchisee signs their franchise agreement, even if the license hasn't been secured yet.
The financial information disclosed for resale transactions depends on the agency's weekly revenue at the time of transfer. If the agency's weekly revenue was less than $15,000 immediately before the transfer, any revenue earned before the transfer date is excluded from Item 19. In this case, the revenue reflected in Item 19 only includes what the new franchisee earned after the transfer date. However, if the agency's weekly revenue exceeded $15,000 at the time of transfer, the revenue included in Item 19 reflects all revenue earned by the agency since its start date.
Item 19 contains different schedules with varying data sets. Tables A, B, and C include only first franchised agencies and, starting in 2022, former first franchised agencies acquired by Brightstar Care's affiliate or larger franchisees. These tables only include agencies open for at least 12 months as of December 31, 2024. Tables D and E include all agencies, regardless of whether they are first agencies or additional agencies, and regardless of how long they have been open. Table F includes various disclosures, with columns for all agencies regardless of the length of time open, or only for first agencies open at least 12 months. Table G includes all franchised and affiliate-owned agencies, regardless of whether they are first or additional agencies, and regardless of the length of time open between October 1, 2002, and December 31, 2024.
Prospective franchisees should pay close attention to these distinctions when reviewing the financial performance representations, as the inclusion or exclusion of pre-transfer revenue can significantly impact the reported figures. Understanding how Brightstar Care defines the transfer date and how it accounts for revenue in resale transactions is crucial for assessing the potential financial performance of an acquired agency.