Under what condition is a Brightstar Care franchisee subject to client/customer non-solicitation obligations after the Franchise Agreement is terminated or expires?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
to the Franchise Agreement as new Section 14.3:
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.
If we (or our designee) elect to purchase the Agency's business and related goodwill under this Section 14.3, the purchase price will be equal to the greater of (a) one-and-one-half (1.5) multiplied by the Agency's Adjusted EBITDA (defined below) during the twelve (12) full calendar months immediately preceding the effective date of termination or expiration of this Agreement and (b) One Thousand Dollars ($1,000) for each active client of the Franchised Business as of the effective date of termination or expiration that is fully and effectively transferred and transitioned to us (or our designee) as part of our purchase.
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, a franchisee faces client/customer non-solicitation obligations under specific conditions after the Franchise Agreement terminates or expires. These obligations are triggered upon the termination of the agreement in compliance with its terms, the franchisee's termination of the agreement without cause in breach of the agreement, or the expiration of the agreement if Brightstar Care offers the franchisee the right to renew but the franchisee declines.
Under these circumstances, Brightstar Care has the right, but not the obligation, to purchase the Agency's business and related goodwill. This right is exercisable by giving written notice before or within thirty days after the effective date of termination or expiration. Brightstar Care also retains the unrestricted right to assign this purchase option to a third party, including an affiliate.
As part of this process, the franchisee is subject to certain non-solicitation restrictions. Specifically, the franchisee cannot solicit any customers within the territory covered by the agreement that were serviced by the Agency during the agreement's term. This includes customers defined as National Accounts customers or referral sources. Additionally, the franchisee cannot provide services to any customers within the territory who were serviced by the Agency during the agreement's term, including National Accounts customers or referral sources. These non-solicitation restrictions replace the post-term non-competition obligations outlined in other sections of the agreement.