How is 'Net Billings' defined for the purpose of calculating royalty fees for a Brightstar Care franchise?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
NOTE 1. Royalty fees are based on a percentage of Net Billings. "Net Billings" is defined as the aggregate of all revenues and other income from whatever source derived (whether in the form of cash, credit, agreements to pay, or other consideration and whether or not payment is received at the time of sale or any of these amounts prove uncollectible), which arise or are derived by you or any other person from business conducted by or originating from the Agency. Net Billings also include all proceeds from any business interruption insurance. The majority of private pay clients pay on average, in about 14 days, and the system-wide blended days' sales outstanding is between 20 and 40 days. As noted below, royalties are collected 28 days after the end of a franchisee's weekly billing period. As a result, the royalty payment cycle generally matches the average time it takes for a franchisee to collect payment from its clients.
If you enter into the Expansion Option Agreement, all income or revenue generated in the Expansion Territory will be treated as Net Billings and be subject to the same conditions and obligations in the Franchise Agreement, including all Royalty/Continuing Fee obligations. However, except for income or revenue you generate from servicing National Account clients located in the Expansion Territory, no income or revenue you generate in the Expansion Territory
will count toward your Monthly Performance Standards or any other Net Billings thresholds under the Franchise Agreement.
Excluded from Net Billings are: (i) sales taxes and other taxes separately stated that you collect from clients and pay to taxing authorities; and (ii) no mark-up items such as personal protective equipment, testing costs, or credit card fees where the amount billed to client is at the franchisee's cost. All Royalties will be collected via EFT 28 days after the end of the weekly billing period.
Source: Item 6 — OTHER FEES (FDD pages 17–34)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, "Net Billings" is the basis for calculating royalty fees. Net Billings is defined as the total revenue and income from any source derived from the Brightstar Care agency's business. This includes cash, credit, agreements to pay, or any other form of payment, regardless of whether payment has been received or if the amounts are uncollectible. Net Billings also includes proceeds from business interruption insurance.
However, there are some exclusions from the Net Billings calculation. Brightstar Care franchisees do not include sales taxes or other taxes collected from clients and remitted to taxing authorities. Additionally, franchisees can exclude the cost of no mark-up items such as personal protective equipment, testing costs, or credit card fees where the amount billed to the client is at the franchisee's cost.
For a Brightstar Care franchisee, understanding the definition of Net Billings is crucial because it directly impacts the royalty fees owed to the franchisor. Franchisees need to accurately track all sources of revenue and properly account for the allowable exclusions to ensure correct royalty payments. Brightstar Care collects all royalties via EFT 28 days after the end of the weekly billing period.