BrightStar Care Franchise Cost & Fees
Date Incorporation: 2002
Franchising Since: 2005
Headquarters: Gurnee, Illinois
Business Description: BrightStar Franchising, LLC is the franchisor. BrightStar agencies provide comprehensive non-medical and medical care to home care clients within their home or residence as well as supplemental healthcare staff to institutional clients. Institutional clients include facilities like hospitals, nursing homes, and clinics.
Franchise Offer: Franchisees will operate an agency that provides and markets comprehensive non-medical and medical home care services to home care clients within their home or residence as well as supplemental healthcare staff to institutional clients according to the administrative and operational components noted in the Franchise Agreement.
Financial Assistance: Neither the franchisor nor affiliates offer direct financing to its franchisees but it may do so in the future. It does, however, offer indirect financing to franchisees through Bancorp Bank’s SBA Loan Program. Since 2013, BrightStar Franchising, LLC has had a Master Program Agreement with Bankof America, NA (BoA) whereby BoA will provide loans to finance the establishment of new start-up businesses of Franchisees that are non-SBA loans, to finance the Franchisee’s purchase, acquisition and transfer of business under a franchise issued by Franchisor, to finance restructures, refinances, rewrites and/or expansions of existing businesses of Franchisees; and to provide revolving lines of credit to franchisees for purposes related to the business of a franchisee, including but not limited to, to meet its working capital needs and to provide for its financing of its accounts receivables. Due to the current lending environment in the United States, the franchisor may also, from time to time provide credit enhancements to lenders for placement of debt or attempt to make arrangements with lenders for accounts receivable financing.
Training and Assistance: Pre-Opening Training is a 5-day in-person training course that includes BrightStar Care-specific training on business basics, leadership, sales, financials, clinical, human resources, and other key topics to enable success in opening the Agency. Franchisees are required to attend Pre-Opening training prior to opening / taking ownership of an Agency. In addition to the 5 days, franchisees are expected to complete approximately 40 hours of on-line pre-work prior to attending this classroom-based course. The Boot Camp Training Program consists of 3 targeted training tracks: 1.) Sales, 2.) Operations, and 3.) Clinical. The Sales track is a 5-day classroom-based training session focusing on the selling process and increasing skill through interactive role-play. The Operations track is a 4-day classroom-based training session with an optional ½ day pre-session. Focus in on the day-to-day administration of the franchised business, including training on all business processes and supporting information technology. The Clinical track is a 4-day classroom-based training session with an optional ½ day pre-session. Focus is on the clinical administrative, regulatory, and compliance aspects of operating the business, as well as understanding the BrightStar Care clinical programs. The franchisor may hold an Annual Conference for all franchisees at a location it selects. Additionally, the franchisor may hold an annual Branch Leadership Conference and require all branch managers/operations managers, directors of nursing, and hired sales personnel to attend. To assist franchisees in operating their Agency, the franchisor may offer additional training programs and/or refresher courses.
Territory: Franchisees will operate their Agency from a location which the franchisor approves. The franchisor assigns franchisees a specific geographic area (Protected Territory) within which it agrees not to (i) open Franchisor-owned Agencies using the Marks, or (ii) authorize any other party to open an Agency using the Marks, if franchisees are not in default under their Franchise Agreement. The franchisor will designate the boundaries of the Protected Territory by Zip Codes. A Protected Territory typically includes a population of 200,000 – 250,000 people. If franchisees wish to purchase a Protected Territory with a population of over 250,000 and less than 400,000, they must pay an additional $200 per additional 1,000 people above 250,000 in the Protected Territory.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If requirements are met, the first renewal option is for 10 years and the second renewal option is for 5 years.
Obligations and Restrictions: We require that the Agency at all times be under your designated Control Person’s direct supervision. During the first two years of operations, the Control Person must be the franchisee (or shareholder of franchisee). Franchisees must seek approval if they wish for their Control Person to be someone other than franchisee (or shareholder of franchisee) during the first two years of operations. Franchisees may hire a branch manager/operations manager to assist them Control Person with the day-to-day operation of the Agency, who must successfully complete all of the required training programs. Franchisees may only sell goods and services that are authorized by the franchisor. Franchisees must offer all goods and services that the franchisor prescribes for the particular type of franchise the franchisee operates.
Estimated Number of Units: 285
|Name of Fee||Low||High|
|Initial Franchise Fee||$50,000 for the first 200,000 – 250,000 in population in the Protected Territory plus $200 for each additional 1,000 (or portion thereof) individuals in the Protected Territory above 250,000|
|Lease Space for Agency||$3,200||$7,200|
|Computer Infrastructure package||$3,500||$5,500|
|Marketing Materials - brochures, business cards, etc. (doesn't include shipping and handling)||$900||$900|
|Grand Opening Advertising||$0||$3,000|
|Business Licenses and Home Health Agency License||$200||$7,400|
|Joint Commission Accreditation Application Fee & Membership, and Initial Accreditation Visit||$0||$4,250|
|Consultants and/or Director of Nursing (hired in advance of opening to meet licensure requirements, as needed)||$0||$5,040|
|CPA to Certify Licensure Submission||$0||$1,000|
|Insurance (excluding workers comp)||$4,455||$6,876|
|Worker’s Comp Insurance||$645||$14,890|
|CSA Training and Certification||$0||$1,595|
|Various Dues and Membership (Annually. Paid within first three months in full)||$0||$500|
|Loan Packaging Fee (SBA Loan or Non- SBA Loan)||$0||$2,500|
|Employee Travel and Living Expenses Associated with Training||$3,360||$4,260|
|Additional Operating Funds – 3 months||$26,276||$64,027|
|Type of Fee||Amount|
|Royalty/Continuing Fee|| (a) For franchisees signing the standard Franchise Agreement or renewing their existing franchises (other than in the early renewal or extension context), (i) 5.25% of monthly Net Billings generated from non-National Accounts and (ii) 6.25% of monthly Net Billings generated from National Accounts, both subject to reduction if certain Annual Net Billings are reached.
(b) For existing franchisees renewing their franchises (as part of the early renewal) or extending their current franchise terms (if that opportunity is available as described in the FDD), (i) 5% of monthly Net Billings generated from non-National Accounts and (ii) 6% of monthly Net Billings generated from National Accounts, both subject to reduction if certain annual Net Billings are reached.
|General Marketing Fee|| (a) For franchisees signing the standard Franchise Agreement or renewing their existing franchises (other than in the early renewal or extension context), beginning on the Opening Date of the Agency, you will pay the greater of $250 per month or 3% of the prior month’s Net Billings.
(b) For existing franchisees renewing their franchises (as part of the early renewal) or extending their current franchise terms (if that opportunity is available as described in the FDD), franchisees will pay the greater of $250 per month or a certain percentage of the prior month’s Net Billings. The specific percentage depends on your Net Billings during the calendar year, as there are potential reductions in the General Marketing Fee scale if certain annual Net Billings caps are reached.
|Monthly Athena Business System and Email Service Fee||Beginning on the Opening Date of the Agency, franchisees will pay the higher of $250 per month or .83% of the prior month’s Net Billings.|
|Supplier Evaluation Service Fee||$250|
|Additional On-site Training (to be provided on an as needed basis)||$500 per day per trainer, plus room, board and travel for each trainer.|
|Seats in Boot Camp Training|| Franchisees receive initial training for all owners included in the Initial Franchise Fee plus 2 seats for their additional staff.
For each additional person that franchisees send through any training program at headquarters there will be a charge of $99/day for a partial or full day of training.
If franchisees acquire their agency(ies) via transfer they receive training for all owners plus 2 seats for additional staff (if not already trained) in training. If the transfer fee paid is less than $15,000, franchisees must pay a $5,000 training fee.
|Annual Conference and Branch Leadership Conference, if any||Franchisees are solely responsible for all travel, room, board and salary expense. The franchisor may charge a registration fee to cover speakers, meals, and activities up to $2,000 per person for the Annual Conference and up to $1,000 per person for Branch Leadership Conference (charged regardless of attendance).|
|Insurance (excluding workers comp)||$5,561 - $6,876 for the first year of operation.|
|Worker’s Comp Insurance||$1,197 - $14,890 for the first year of operation, subject to audit based on actual payrolls incurred during the policy term.|
|Transfer Fee||$15,000 for first Agency. $5,000 for each additional agency transferred to the same buyer (if the transfer involves a 50% or more change in ownership), plus any fees paid directly to a broker if buyer found through broker (approximately $15,000 - $26,000). If the transfer reflects a 49% or less change in ownership, the transfer fee will be calculated based upon the percentage of ownership change.|
|Lost Future Royalties||Depends on circumstances.|
|Indemnification and Defense||All costs including attorneys’ fees; amount will vary under circumstances.|
|Cost and Attorney’s Fees||Will vary under circumstances.|
|Examination/Audit of Franchisee’s Records||Varies, but estimated examination expense is $500 (including our reasonable accounting, legal fees and travel expenses), plus full amount of any underpayment and interest and late charges on any underpayment.|
|Under-reporting Penalty||Unpaid royalties plus cost of inspection, plus interest on underpayment for the period of time the underpayment occurred.|
|Late Fees||Highest applicable legal rate for open account business credit not to exceed 1.5% per month.|
|Acquisition Fee||If the franchisee acquires a non-BrightStar branded business and converts the business to a BrightStar Agency consistent with the BrightStar Program, he/she will pay an Acquisition Fee up to 2% of the transaction amount.|
|Accounts Receivable Finance Program Administration Fee||Up to 2% of the accounts receivable financing balance for administration and management of the Accounts Receivable Finance Program.|
|Cross-Territorial Policy Payment||Varies, although currently the payment may be as much as the full gross margin (less royalties) for each client.|
|Client Resolution Fee||The greater of $500 or $50/hour.|
The above information has been taken from the FDD of BrightStar Care. Year of FDD: 2016
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