What was the outcome of the Brightstar Care case after the settlement 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 settlement was reached in the case between Cosmo Fraser and Adam Fraser vs. BrightStar Franchising, LLC, et al. The Frasers, who were former franchisees operating a Brightstar Care franchise in Georgia, initiated arbitration on March 15, 2017, alleging violations of consumer fraud and franchise disclosure laws, statutory fraud, common law fraud, and negligent representation. They claimed that Brightstar Care failed to disclose that their territory was not new, had been operated by two previous franchisees, was smaller than most, and misrepresented financial performance. The Frasers sought damages exceeding $500,000, including rescission of the franchise agreement, punitive damages, and attorney's fees.
To avoid further legal proceedings, Brightstar Care settled the case on March 1, 2018. As part of the settlement, Brightstar Care paid the Frasers a total of $215,000. The parties then exchanged mutual releases, and the case was dismissed with prejudice. This means that the case was permanently dismissed and cannot be brought back to court.
For a prospective franchisee, this information highlights the importance of thorough due diligence before investing in a Brightstar Care franchise. It is crucial to investigate the history and potential of the territory, verify financial performance claims, and understand the legal and financial risks involved. This case also demonstrates that disputes can arise between Brightstar Care and its franchisees, and that settlements may involve significant costs.