How much did Brightstar Care pay to settle the case with the Frasers?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Cosmo Fraser and Adam Fraser vs. BrightStar Franchising, LLC, Shelly Sun, Thomas Gilday, Scott Oaks, et al. (American Arbitration Association Case No. 02-16-0005-0209, filed March 15, 2017). The Frasers, former franchisees who operated one BrightStar Care franchise in Georgia, filed this arbitration against us and certain of our then principal officers (among others). They alleged violation of the Illinois Consumer Fraud and Deceptive Practices Act, violation of the Illinois Franchise Disclosure Act, statutory fraud under Georgia law, common law fraud, and negligent representation in connection with the Frasers' acquisition of their franchise. The Frasers alleged that the defendants failed to disclose before granting the franchise that the franchised territory was not a "new" territory, previously operated by 2 different franchisees who allegedly had failed, and allegedly was smaller than most franchised territories we have granted and also allegedly misrepresented the financial performance for first-year franchisees. The Frasers sought rescission of the franchise agreement and rescissionary or compensatory damages in excess of $500,000, punitive damages, attorneys' fees and costs, and other relief. We settled the case on March 1, 2018, in order to avoid further legal proceedings. We paid the Frasers a total of $215,000, the parties exchanged mutual releases, and the case was dismissed with prejudice.
Source: Item 3 — LITIGATION (FDD pages 15–16)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, a lawsuit was filed against BrightStar Franchising, LLC, and certain officers by former franchisees Cosmo and Adam Fraser on March 15, 2017. The Frasers alleged violations of consumer fraud and franchise disclosure laws, statutory fraud, common law fraud, and negligent representation related to their franchise acquisition. They claimed that Brightstar Care failed to disclose that their territory was not new, had been operated by two previous franchisees who failed, was smaller than most territories, and misrepresented financial performance. The Frasers sought rescission of the franchise agreement, damages exceeding $500,000, punitive damages, attorneys' fees, and other relief.
To avoid further legal proceedings, Brightstar Care settled the case on March 1, 2018. Brightstar Care paid the Frasers a total of $215,000. As part of the settlement, both parties exchanged mutual releases, and the case was dismissed with prejudice, meaning it cannot be brought back to court.
This type of legal settlement is not uncommon in franchising, as disputes can arise between franchisors and franchisees regarding various aspects of the franchise agreement and operations. Prospective franchisees should carefully review Item 3 of the FDD, which discloses any litigation involving the franchisor, to assess the potential risks and legal history associated with the franchise system. Understanding the nature and outcome of past legal disputes can help franchisees make informed decisions about investing in a franchise.