How does the Brightstar Care initial investment (Item 7) relate to the ongoing fees outlined in Item 6?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of expenditure | Amount | Method of payment | When due | To whom payment is to be made | |---|---|---|---|---| | State Electronic Visit Verification (“EVV”) See Note 11 | $0 – $2,000 | Drafted monthly from your bank account via EFT. | Per terms of invoice | BrightStar Technology or other Approved vendor | | Insurance (excluding workers comp) See Note 13 | $1,740 – $5,000 | Directly to approved supplier as per supplier’s invoice | As per terms of invoice | Approved vendor | Additional optional on-site training will be made available on an as-needed basis for an additional fee (see Item 6) (§3.2.8 and 3.2.9). NOTE 5: Electronic Visit Verification ("EVV") is required by some states when a franchisee participates in certain Medicaid waiver programs. If required by the state, this fee covers the cost of integrating ABS with the state aggregators or third party/ies selected by the state. If any fees are charged to use a state-specified EVV system, that cost is your responsibility. The integration enables the data required to authorize and approve payment to flow automatically between ABS and the state. Without this automation, the state may require the franchisee to enter the data manually on its portal or website. The one-time fee per aggregator covers the initial set-up and testing of the integration. Most states require integration with only one aggregator, while other states might require integration with up to 2 aggregators. The on-going "per record" charge covers the ongoing maintenance costs of supporting the integration and on-going changes required by the state. NOTE 13. Insurance Excluding Workers Comp. The estimate in the table above represents your estimated insurance costs (excluding workers comp) for the first 3 months you operate your Agency. Your estimated yearly insurance costs (excluding workers comp) during year 1 will range from $6,400 - $12,000 paid either by lump sum payment or finance premiums on monthly installments depending upon provider selected. We disclose required insurance coverage in Item 6. All insurance companies must carry an A.M. Best's rating of "A-/Excellent" or better, or be approved by BrightStar in writing before placement of coverage.
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, the initial investment in Item 7 includes several expenses that may lead to ongoing fees as described in Item 6. For example, the initial investment includes costs associated with State Electronic Visit Verification (EVV), which ranges from $0 to $2,000. Item 6 clarifies that if EVV is required by the state, the franchisee is responsible for the costs of integrating BrightStar Care's system (ABS) with state aggregators or third parties. While a one-time integration fee covers the initial setup, ongoing "per record" charges cover maintenance and changes required by the state. This means that the initial investment for EVV could lead to recurring fees.
Another example is the initial investment range for insurance (excluding workers' compensation), which is estimated between $1,740 and $5,000 for the first three months. Item 7 notes that the estimated yearly insurance costs during year 1 will range from $6,400 to $12,000. Item 6 specifies that all insurance companies must have an A.M. Best's rating of "A-/Excellent" or better, or be approved by BrightStar Care in writing. This indicates that franchisees will have ongoing insurance expenses, and they must adhere to BrightStar Care's standards for insurance providers.
Additionally, Item 11 mentions that optional on-site training is available for an additional fee, as detailed in Item 6. This suggests that while the initial investment covers mandatory training, franchisees may incur further costs for additional training services to improve their operations. Therefore, while Item 7 provides an overview of the initial costs, franchisees should be aware that some of these initial expenditures can lead to recurring or optional ongoing fees as described in Item 6, impacting the overall cost of operating a Brightstar Care franchise.