Under what conditions will Brightstar Care consent to a transfer of interest in a franchise?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor prior to any proposed Transfer of an equity or voting interest, and at any other time upon request, a list of all owners reflecting their respective present and/or proposed direct or indirect interests in you in such form as we may require.
12.4 Conditions to Our Consent to Transfer
You understand and acknowledge the vital importance of your performance to the market position and overall image of the BrightStar Care Agency Program. You also recognize the many subjective factors comprising the process by which we select a suitable franchisee. We will not unreasonably withhold our consent to a Transfer of any interest in this Franchise or any equity or voting interest in you, but such consent will remain a subjective determination that is subject to your and the transferee's compliance with and satisfaction of numerous conditions, including, but not limited to, the following:
- 12.4.1 (a) The transferee and its owners must demonstrate to our sole satisfaction that they meet all of our requirements for becoming a franchisee, including, without limitation, our financial, entrepreneurial, and managerial and business standards then in effect for similarlysituated franchisees, possess a good moral character, business reputation, and satisfactory credit rating, will comply with our instruction and training requirements, and have the aptitude and ability to operate the Agency (as may be evidenced by prior related business experience or otherwise, including, without limitation, that the transferee and its affiliates are in substantial operational compliance, at the time of the application, under all other franchise agreements for BrightStar Care Agencies to which they then are parties with us), (b) the transferee is aware of the incremental costs that must be invested to bring any and all agencies into compliance with our then-existing requirements for office locations, personnel, advertising and recruiting spend, and other items and has satisfactorily considered those costs in its investment plan and purchase price and (c) the transferee and/or its owners are not a private equity firm or a Search Fund.
- 12.4.2 As of the proposed Transfer's effective date, all your obligations under this Agreement and any other agreements with us are fully satisfied.
- 12.4.3 You have satisfied all monetary obligations owed to us and our affiliates and designated suppliers.
- 12.4.4 You have been in substantial compliance with this Agreement and all other agreements with us and our affiliates and designated suppliers throughout the Initial Term.
- 12.4.5 As of the proposed Transfer's effective date, all of the proposed transferee's obligations to us and our affiliates and designated suppliers (if any) must be fully satisfied.
- 12.4.6 As of the proposed Transfer's effective date, the transferee must have the unconditional right to occupy the Premises and assume your lease for its remaining term (and to secure an option to renew the lease on terms agreeable to the landlord and transferee).
- 12.4.7 Except as provided below in this Section 12.4.7, if the Transfer results in a 50% or more change in your ownership, you or the transferee must pay us a transfer fee of $15,000 for the Agency and (but only if a Transfer of multiple agencies is permitted by us as described below in Section 12.4.19) $5,000 for each additional agency transferred, plus any broker fees we incur in helping you find a transferee. However, if the Transfer results in a 49% or less change in your ownership, the transfer fee will be calculated based upon the percentage of ownership change, plus any broker fees we incur in helping you find a transferee. For example, if the Transfer results in a 25% ownership change in you, the transfer fee will be 25% of $15,000. If the transferee will
be involved in the Agency's day-to-day operations, we may require the transferee to attend and successfully complete new owner training. If the Transfer involves 49% or less in ownership and a full transfer fee is not collected, the transferee must pay the then-current training fee to attend new owner training. Fifty percent (50%) of the transfer fee is due either upon listing the Agency for sale or, if the Agency is not formally listed for sale, before buyer attends Discovery Day. The balance is due when the transferee signs the franchise agreement.
12.4.8 Notwithstanding the foregoing, if the Transfer involves this Agreement or the Agency, or a 50% or more change in your ownership, and the transferee is a person or entity who was a "Lead" of ours (defined below) before you or your owner became aware of or was introduced to the Lead and before you had listed the Agency with us for sale, you or the transferee must pay us the greater of: (a) the applicable transfer fee for each agency affected by the Transfer; or (b) the initial franchise fee that we would have collected for the territory if we had granted the franchise rights for it to the Lead, plus any broker fees we incurred as a result of the Transfer. This higher transfer fee compensates us for our lost opportunity of potentially granting a new franchise to the Lead for a new Agency, as each year we spend significant financial and human resources on targeted advertising and marketing of the BrightStar Care franchise opportunity in order to attract and identify qualified persons who are interested in purchasing new franchise rights for newlydeveloped Agencies.
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, Brightstar Care will not unreasonably withhold consent to a transfer of any interest in the franchise. However, this consent is a subjective determination that depends on both the franchisee's and the transferee's compliance with several conditions.
The transferee must meet all of Brightstar Care's requirements for becoming a franchisee. These requirements include meeting the company's financial, entrepreneurial, managerial, and business standards, having a good moral character, business reputation, and satisfactory credit rating, complying with training requirements, and demonstrating the aptitude and ability to operate the agency. The transferee must also be aware of the incremental costs required to bring all agencies into compliance with Brightstar Care's existing requirements for office locations, personnel, advertising and recruiting spend, and other items, and must have satisfactorily considered those costs in their investment plan and purchase price. Furthermore, the transferee and/or its owners cannot be a private equity firm or a Search Fund.
Additional conditions include the transferor executing a general release of any claims against Brightstar Care, and the proposed transferee executing Brightstar Care's then-current form of franchise agreement and the Addendum to Franchise Agreement. Both parties must also execute Brightstar Care's then-current Assignment and Consent Agreement, and Co-Territory Agreement (if applicable). The transferee and/or its designated managerial personnel must complete the training required of comparable Agency franchisees. The transferee must obtain and maintain all licenses and registrations necessary to operate the Agency to the fullest extent of the BrightStar business model. The transferor and transferee must agree to perform all maintenance and upgrades required to bring the Franchised Business up to Brightstar Care's then current standards for an Agency, including upgrading the ABS and any other computer hardware and software as required. Finally, the transferor or the transferee must provide Brightstar Care with a copy of the executed purchase agreement relating to the proposed Transfer with all supporting documents and schedules, including transferee's assumption of and agreement to faithfully perform all of the transferor's obligations under the Franchise Agreement.
Brightstar Care also has the right to limit the transfer to only the specific franchise agreement in question, even if the franchisee desires to transfer multiple franchise agreements simultaneously to the same transferee. This right is reserved to preserve compliant operations and protect the System's reputation and goodwill. If the transfer involves the Agreement or Agency, or a 50% or more change in ownership, and the transferee was a "Lead" of Brightstar Care before the franchisee was aware of them, the franchisee or transferee must pay Brightstar Care the greater of the applicable transfer fee or the initial franchise fee that Brightstar Care would have collected for the territory if they had granted the franchise rights to the Lead, plus any broker fees incurred as a result of the Transfer.