(Ambrosio’s note: Welcome to FDD Talk 2.0, a more comprehensive version of our flagship content, featuring not only the Item 19 financial performance representations of select franchises, but their estimated initial investment, unit growth, and other key items of their 2012 FDD as well.)
Highlights of BrightStar Care’s 2012 Franchise Disclosure Document – Part 2
A. Franchisee Revenue (First Location Only)
- In some instances, franchisees operate more than one BrightStar Agency. Sections A-C and E-F include financial information for a franchisee’s first Agency location only. Accordingly, if a franchisee operates more than one BrightStar Agency, the information in Sections A-C and E-F include financial information for the franchisee’s first Agency only.
- Information for first locations only is presented in certain sections of this Item 19 because during the economic downturn of 2008 through 2011, many franchisees were unable to secure the capital needed to follow the full business model in their additional locations. As a result, BrightStar made a conscious decision to work with their franchisees and not enforce performance minimums for a franchisee’s second location through 2010, and in the second half of 2011, offered 49 opening delays and mutually terminated the rights to 14 additional units (where the franchisee remained). Thus, data for additional locations is not representative of performance and therefore excluded from selected sections.
A.1. Average Revenue for Full-Time First Location Agencies
- This section illustrates the average revenue, displayed by quartile, earned by BrightStar franchisees for their first location only during (i) their first 12 months of operation commencing on their Start Date, (ii) their second year (months 13 through 24) of operation commencing on their Start Date, (iii) their third year (months 25 through 36) of operation commencing on their Start Date, (iv) their fourth year (months 37 through 48) of operation commencing on their Start Date, (v) their fifth year (months 49 through 60) of operation commencing on their Start Date, and (vi) the 2011 calendar year for franchisees open 12 months or longer and 24 months or longer.
- For purposes of this financial performance representation, “Quartile” refers to the relative performance of BrightStar Agencies. Specifically, “Quartile 1” refers to the top 25% of performing Agencies, “Quartile 2” refers to the next highest 25% of performing Agencies, “Quartile 3” refers to the next highest 25% of performing Agencies, and “Quartile 4” refers to the bottom 25% of performing Agencies.
First Year Performance
- Because the Start Date for each franchisee differs, the first year performance revenue information includes revenues earned by franchisees during 12 month time periods in 2006, 2007, 2008, 2009, 2010, and 2011.