What representations, warranties, and indemnities is Brightstar Care entitled to in its purchase of the Agency's business?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon our termination of this Agreement in compliance with its terms, your termination of this Agreement without cause in breach of this Agreement, or expiration of this Agreement (if we offer you the right to renew the franchise for the Franchised Business but you choose not to renew), we have the right (but no obligation), exercisable by giving you written notice before or within thirty (30) days after the effective date of termination or expiration, to purchase the Agency's business and related goodwill (other than any goodwill we already own). We have the unrestricted right to assign this purchase option to a third party (including an affiliate), which then will have the rights and obligations described in this Section 14.3. We (or our designee) are entitled to all customary representations, warranties, and indemnities in our purchase, including representations and warranties regarding ownership and condition of, and title to, assets; liens and encumbrances on assets; validity of contracts and liabilities affecting the assets, contingent or otherwise; and indemnities for all actions, events, and conditions that existed or occurred in connection with the Agency before the closing of the purchase. You also agree (at our option) to assign to us (or our designee) the lease for the Agency's premises or to enter into a sublease for the remainder of the lease term on the same terms (including renewal options) as the lease.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 81–92)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, if Brightstar Care terminates the Franchise Agreement, the franchisee terminates without cause, or the agreement expires and the franchisee does not renew, Brightstar Care has the option to purchase the Agency's business. This option is exercisable by providing written notice within 30 days of termination or expiration. Brightstar Care can also assign this purchase option to a third party.
As part of this purchase, Brightstar Care (or its designee) is entitled to customary representations, warranties, and indemnities. These include assurances regarding the ownership, condition, and title to the assets of the agency. They also cover any liens or encumbrances on those assets, the validity of contracts, and any liabilities affecting the assets, whether contingent or otherwise.
Furthermore, Brightstar Care is entitled to indemnities for any actions, events, or conditions that occurred in connection with the Agency before the purchase closing. The franchisee must also agree to assign the lease for the Agency's premises to Brightstar Care or enter into a sublease on the same terms, including renewal options, if Brightstar Care chooses.