After the termination of the Brightstar Care franchise agreement, for how long are franchisees restricted from engaging in a Competing Business?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
11.4.3 You covenant, for a period of twenty-four (24) months after the expiration, non-renewal or termination of this Agreement, regardless of the cause of termination, or for twenty-four (24) months after sale of the Agency or any interest in you, either directly or indirectly, for yourself or through, on behalf of, or in conjunction with any person or entity, not to own, manage, operate, maintain, engage in, consult with or have any interest in any Competing Business:
(a) Located at the premises of the former Agency;
(b) Located or operating within the Protected Territory of the former Agency;
(c) Located or operating within the protected territory of any other BrightStar Care Agency (whether owned by a franchisee, us, or our affiliates) in operation on the effective date of the expiration, non-renewal, termination, or transfer; or
(d) Located or operating within a 25-mile radius of the outer boundaries of the protected territory of any other BrightStar Care Agency (whether owned by a franchisee, us, or our affiliates) in operation on the effective date of the expiration, non-renewal, termination, or transfer.
11.4.4 You covenant, for a period of twenty-four (24) months after the expiration, non-renewal or termination of this Agreement, regardless of the cause of termination, or for twenty-four (24) months after sale of the Agency or any interest in you, not to solicit business from clients of your former Agency, from any National Accounts, or from referral sources with which your former Agency or the BrightStar System did business during the Initial Term and not to contact any of our suppliers or vendors in connection with your ownership, management, operation, maintenance of, engagement in, consulting with, or having any interest in any Competing Business.
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, franchisees are restricted from engaging in a Competing Business for a period of 24 months after the expiration, non-renewal, or termination of the franchise agreement. This restriction applies regardless of the cause of termination. The same 24-month restriction applies after the sale of the Brightstar Care agency or any interest in it.
This non-compete clause prevents former franchisees from leveraging the knowledge and resources gained during their time with Brightstar Care to directly compete against the franchise system shortly after their departure. The restriction extends not only to the franchisee's former territory but also to the protected territory of any other Brightstar Care agency in operation at the time of termination, non-renewal, or transfer. It also includes a 25-mile radius around those protected territories.
Furthermore, the agreement prohibits former franchisees from soliciting business from clients of their former agency, National Accounts, or referral sources with which their former agency or the Brightstar Care system did business during the initial term. They are also barred from contacting Brightstar Care's suppliers or vendors in connection with any Competing Business. This is a fairly standard practice in franchising to protect the brand's customer relationships and supply chain.
These restrictions are designed to protect Brightstar Care's market share, customer base, and confidential information. Prospective franchisees should carefully consider the implications of these post-term covenants, as they could significantly impact their ability to operate a similar business in the healthcare industry after leaving the Brightstar Care system.