Under what condition can a Brightstar Care franchisee terminate the Franchise Agreement?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
-
- The following language is added 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.
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's ability to terminate the Franchise Agreement without cause is addressed in an addendum specific to California. This addendum states that if Brightstar Care terminates the agreement according to its terms, or if the agreement expires and the franchisee chooses not to renew after being offered the option, or if the franchisee terminates the agreement without cause in breach of the agreement, Brightstar Care has the option to purchase the agency's business and related goodwill. This option is exercisable by providing written notice within 30 days of the termination or expiration date.
This clause also allows Brightstar Care to assign this purchase option to a third party. If Brightstar Care (or its designee) exercises this option, they are entitled to customary representations, warranties, and indemnities in the purchase. These include assurances regarding the ownership, condition, and title of assets, any liens or encumbrances on the assets, the validity of contracts, and any liabilities affecting the assets. The franchisee must also provide indemnities for actions, events, and conditions connected to the agency before the purchase closing.
Additionally, Brightstar Care has the option to have the franchisee assign the agency's premises lease to them or enter into a sublease for the remainder of the lease term under the same terms, including renewal options. This addendum modifies the standard agreement to include specific conditions related to termination and the potential purchase of the agency by Brightstar Care, particularly in California.