Regarding notes receivable from affiliated companies, are the notes provided by Brightstar Care collateralized?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Depreciation and amortization expense was $2,846,570 and $1,992,427 for the fiscal years ended December 29, 2024 and December 31, 2023, respectively.
6. Notes Receivable – Affiliated Companies, Net
The Company has historically provided advances to companies affiliated through common ownership. The notes are subject to voluntary prepayment at any time, in whole or in part, without penalty. No formal repayment plans exist for these uncollateralized notes. A right of offset exists with the notes.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 117)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, the notes receivable from affiliated companies are uncollateralized. Specifically, Brightstar Care has historically provided advances to affiliated companies. These notes are subject to voluntary prepayment at any time, without penalty. However, there are no formal repayment plans in place for these notes, and they are not backed by any collateral. A right of offset exists with the notes.
For a prospective Brightstar Care franchisee, this information is relevant because it indicates the financial relationships between Brightstar Care and its affiliated companies. The fact that these notes are uncollateralized means that in the event of default by an affiliated company, Brightstar Care may not have assets to recover the outstanding amounts. This could potentially impact the financial stability of Brightstar Care, which could indirectly affect franchisees.
It is important for potential franchisees to understand the financial health and intercompany relationships of the franchisor. While the FDD provides this information, prospective franchisees may want to seek additional clarification from Brightstar Care regarding the nature of these advances, the financial stability of the affiliated companies, and the potential impact on the franchise system. Understanding these relationships can help a franchisee assess the overall risk and stability of investing in a Brightstar Care franchise.