Under what circumstances can Brightstar Care assign its franchise agreement to a third party?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
- 12.4.19 Notwithstanding anything above, you expressly acknowledge the reasonableness of the following Transfer condition: If you and/or your affiliates (a) own and operate, either when you request approval of a proposed Transfer or as of the proposed Transfer's effective date, more than one BrightStar Care Agency under one or more additional franchise agreements with us, regardless of when such franchise agreements were signed, and (b) desire to Transfer this Agreement and/or the Agency, together with one or more of your and/or your affiliates' other franchise agreements and/or BrightStar Care Agencies, at the same time and to the same proposed transferee and/or its affiliates as part of the same transaction or in a series of substantially contemporaneous transactions, we have no obligation to allow the Transfers of the multiple BrightStar Care Agencies and instead have the absolute right to limit the proposed Transfer solely to this Agreement and/or the Agency without regard to the proposed terms of the Transfer or Transfers negotiated between you and/or your affiliates and the proposed transferee and/or its affiliates.
We reserve this right in order to preserve and enhance compliant operations of BrightStar Care Agencies and to protect the System's reputation and goodwill.
You further acknowledge that the rights described in this paragraph will apply even if the proposed Transfer is of a controlling ownership interest in you (as defined in Section 12.7 below) in situations where you own multiple BrightStar Care Agencies under one or more franchise agreements with us.
In other words, we may disapprove the Transfer of a controlling ownership interest in you if the Transfer would result in new owners of yours effectively controlling the Agency and additional BrightStar Care Agencies under separate franchise agreements with us.
- 12.4.20 In addition to the above, you acknowledge that we have legitimate reasons to evaluate the qualifications of potential transferees and to analyze and critique the terms of their purchase contracts with you, and our contact with potential transferees to protect our business interests will not constitute improper or unlawful conduct.
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
The 2025 Brightstar Care Franchise Disclosure Document (FDD) addresses the transfer of franchise agreements in Item 22, specifically outlining conditions where Brightstar Care may limit or disapprove a transfer. If a franchisee or their affiliates own and operate multiple Brightstar Care agencies under separate franchise agreements and wish to transfer this agreement along with others to the same transferee, Brightstar Care retains the right to allow the transfer of only the specific agreement in question. This is regardless of any terms negotiated between the franchisee and the proposed transferee.
Brightstar Care reserves this right to ensure compliant operations across all Brightstar Care agencies and to safeguard the system's reputation and goodwill. This applies even if the proposed transfer involves a controlling ownership interest in the franchisee, which would result in new owners effectively controlling multiple Brightstar Care agencies under different franchise agreements.
Brightstar Care emphasizes its legitimate need to evaluate potential transferees' qualifications and scrutinize the terms of their purchase contracts with franchisees. The FDD states that Brightstar Care's contact with potential transferees to protect its business interests will not be considered improper or unlawful conduct. This protects Brightstar Care's ability to maintain brand standards and operational consistency across its franchise network when a franchisee seeks to transfer ownership.