In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the BrightStar Care franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a BrightStar Care franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a BrightStar Care franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of BrightStar Care’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average revenue, displayed by quartile, earned by BrightStar franchisees for their first agency only
- 2016 average, median, high, and low gross margin percentage for all agencies opened by franchisees as their first location (regardless of how long the agencies were in operation during the particular year), including all resale locations, for locations open 3 months or longer as of December 31, 2016
- 2016 average, high, and low hours billed per client per week for all franchisee first agencies, including all resale locations, open and operating for at least 3 months as of December 31, 2016
- 2016 average weekly hours worked per employee, number of employees per week, and number of clients per week during the four pay periods running from November 27, 2016 through December 18, 2016 for all franchisee first agencies for all ongoing clients for locations open and operating 3 months or longer as of December 31, 2016
- 2016 average mix of business for all agencies in operation in 2016
- 2016 total, average, high, and low national account revenues contributed to the system by the national account program for all first agencies from January 1, 2016 through December 31, 2016
Section I – Background Information
11 Things You Need to Know About the BrightStar Care Franchise
Appoints New Vice President of Franchise Development
1. In July, BrightStar Care announced that it had expanded its senior leadership team in an effort to aid the brand’s nationwide expansion. Among the new appointments was David Campagna as the vice president of franchise development. With Campagna in his new role, BrightStar says that the company is entering a new era of growth with the goal of reaching 500 locations by 2020.
2. Campagna will be responsible for the brand’s domestic franchise development as well as leading BrightStar’s plans to target new and existing markets for growth. Prior to joining BrightStar Care, Campagna spent over 20 years in the franchise industry. He brings with him extensive experience in franchise development and sales.
3. Shelly Sun, CEO and co-founder of BrightStar Care, said, “David is a key addition to our Senior Leadership Team and he brings with him a wealth of knowledge that will be vital to the success of BrightStar Care’s strategic expansion. As we continue to execute our brand’s development plans, David’s skills and broad experience will play a large role in helping lead BrightStar Care into the next phase of its growth journey.”
Named Enterprise Champion for Quality Awardee for 5th Consecutive Year
4. At the start of September, BrightStare Care was given The Joint Commission’s 2017 Enterprise Champion for Quality Award, honoring the brand’s dedication to meeting the highest standards in in-home care. BrightStar has earned this award five years in a row and is one of only two franchisors to receive the honor since the award’s inception in 2013.
5. To qualify for the award, a franchisor must demonstrate that a minimum of 95 percent of its franchisees are accredited and in good standing with the Joint Commission, the nation’s oldest and largest standard-setting and accrediting body in healthcare that accredits some of the nation’s most well-respected health systems.
6. Margherita Labson, RN, executive director, Home Care Accreditation Program, The Joint Commission, said, “The Joint Commission commends BrightStar Care for not only achieving this prestigious recognition and the high level of quality that it represents – but also doing so for five consecutive years.”
CEO and Co-Founder Honored as 2017 Entrepreneur of the Year
7. In early November, Shelly Sun, co-founder and CEO of BrightStar Care, was honored by her alma mater, the Haslam College of Business, with its 2017 Entrepreneur of the Year award. Sun, who graduated from Haslam in 1992, was recognized at the school’s ninth annual Alumni Awards Gala, which benefits the College Fund for the Haslam College of Business.
8. Sun attended the university to receive her accounting degree and ended up placing in the top 100 of the CPA exam within a year of graduation. She attributes her success at Haslam to the two internship opportunities that she was given through the accounting program.
9. BrightStar Care was founded in 2002 by Shelley Long and her husband J.D. Sun. Long, who already was a franchisee for two hotel chains, founded BrightStar Care because she personally knew how difficult it was to find quality care for aging loved ones. Just three years later, in 2005, Long and Sun started franchising BrightStar Care, which made it the first franchising company in the U.S. to specialize in both medical and non-medical care and health care staffing.
10. BrightStar Care was almost immediately successful and Long says that it was revenue-positive by its fourth month and generated more than $1 million in its first year. The company has continued to grow and today there are over 300 BrightStar Care facilities across the U.S. and one location in Canada with plans for more.
Entrepreneur’s Franchise 500
11. BrightStar Care has ranked on Entrepreneur’s annual Franchise 500 list every year since 2011. The company’s highest rank was No. 69 in 2017, while its lowest rank was No. 177 in 2016.
Section II – Estimated Costs
- Please click here for detailed estimates of BrightStar Care franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on BrightStar Care’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
Part 1 – Franchisee Revenue (First Agency Only)
- In some instances, franchisees operate more than one BrightStar agency. Parts 1-3 include financial information for the franchisee’s first agency location only.
- Information only for first agencies is presented in certain sections of BrightStar’s Item 19 because during the economic downturn of 2008 through 2012, many franchisees were unable to secure the capital needed to follow the full business model in their additional agencies.
- Delays were allowed in securing office locations and personnel to follow the business model in these additional agencies.
- This section illustrates the average revenue earned by BrightStar franchisees for their first agency only.
- For purposes of this financial performance representation, “Quartile” refers to the relative performance of the 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.
2016 Average Revenue for Franchisees Open 12 Months or Longer