What obligations does a Brightstar Care franchisee have regarding approved suppliers (Item 8) and how are these obligations detailed in Item 9?

ector(s) of Nursing.

You must purchase all signs, uniforms, drug screening services, and medical supplies (where alternative sources of supply are unavailable) from us, designated suppliers or approved suppliers. You must offer services in the manner we prescribe, provide quality client service, and otherwise operate the Agency to enhance the image we intend for the BrightStar Care Agency Program, including the live answer for existing and prospective customers, employees, and applicant calls as outlined in the Operations Manual.

We formulate and modify our standards and specifications for products and services based upon marketplace and reimbursement changes, the collective experience of our franchisees and our company-owned locations, and our franchise support center personnel. We have the right to change our standards and specifications, including those for products, services, signs, and medical supplies, by written notice to you or through changes in the Operations Manual. You may incur an increased cost to comply with these changes at your own expense; however, no change will materially alter your fundamental rights under the Franchise Agreement. We will notify you of any change to our standards and specifications by way of electronic or written amendments to the Operations Manual or otherwise in writing.

If you wish to purchase from an unapproved supplier any item or service designated to be purchased only from an approved supplier, you may request our evaluation of a proposed supplier, a description of the item you wish to purchase, and purchase price of the item, if known. While we are not required to approve any particular supplier, we may base our approval of any proposed item or supplier on considerations relating to the item or supplier itself as well as to the uniformity, efficiency, and quality of operation we deem necessary or desirable for our BrightStar Care Agency Program as a whole. We will notify you in writing (via email or otherwise) of our approval or disapproval of a proposed supplier, product, or service within 30 days after receiving all requested information. We may charge you up to $5,000 for the evaluation if we ultimately approve the supplier. However, we will charge a minimum fee of $2,500 if the vendor, as part of its proposed scope of services, will need access to any of our technology platforms; this fee goes to pay a third party for its risk-assessment services and is due whether or not we approve the supplier. We may revoke our approval of particular products or suppliers when we determine they no longer meet our standards. Upon receipt of written notice of such revocation, you must cease purchasing products from such supplier. You must use products purchased from approved suppliers solely in connection with the Agency's operation and not for any competitive business purpose. Despite these procedures, we may limit the number of approved suppliers, designate sources you must use, and refuse your requests for any reason, including because we already have designated an exclusive source (which might be us or our affiliate) for a particular item or service or believe that doing so is in the best interests of the BrightStar Care network. One of our officers owns an interest in BrightStar Technology. Otherwise, no officer or director owns an interest in a 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.