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Financial Disclosure Footnotes


If you are an existing franchisee renewing your franchise and sign our current Franchise Agreement together with the Standard Renewal Addendum to Franchise Agreement, you will not incur most of these costs because your Agency already is open. However, we may require you to make certain upgrades, modifications, and improvements at your Agency to meet our current standards. Your costs will depend on your Agency’s current condition.


* All fees and payments are non-refundable, unless otherwise stated or permitted by the payee.

NOTE 1. Initial Franchise Fee. The Initial Franchise Fee is nonrefundable and more fully described in Item 5.

NOTE 2. Leased Premises. You will need approximately 250 to 800 sq. ft. of office space. Rates may vary depending on different regions of the country. This estimate includes rent for the first three months and a deposit of last month’s rent. If a landlord is paying for some of the improvements to the leased space, it may amortize that expense in the form of additional rent. Payments will be made directly to the landlord according to the lease’s terms. The site is subject to our approval. You should consult with your own attorney regarding the lease and related matters.

NOTE 3. Furnishings. This includes 3 desks, 3 office chairs, 2 guest chairs, telephone equipment, pictures, curtains, and office supplies.

NOTE 4. Computer Infrastructure Package. Item 11 describes the required package.

NOTE 5. Signage. All signage is subject to our approval.

NOTE 6. Deposits. This item includes utility deposits, telephone company deposits, and electric and other energy company deposits.

NOTE 7. Marketing Materials. Includes a 3-month supply of brochures and business cards.

NOTE 8. Business Licenses and Home Health Agency License. State rules vary on medical and staffing licensure and other associated licenses, e.g., CLIA waiver.

NOTE 9. Joint Commission Accreditation Fee. You must obtain and maintain in good standing Joint Commission Accreditation at all times during the franchise term. With the exception of franchisees located in Florida, franchisees must submit their application within 9 months, and obtain Joint Commission Accreditation within 12 months, after opening the Agency. Florida franchisees generally obtain Joint Commission Accreditation during the first 3 months after opening their Agency because of state licensure requirements. Joint Commission Accreditation is a certification in the medical community which is given to businesses that meet or exceed specific national care and quality guidelines and standards.

NOTE 10. Consultants and/or Director of Nursing. Some states require you to hire a Consultant and/or Director of Nursing in advance of opening to meet state licensure requirements. A local consultant may be required to assist with licensure submission. Certain states may allow director of nursing to facilitate licensure filings in place of a consultant. In that instance, the director of nursing would need to be on staff before opening. Nurse pay rates vary widely regionally. The amount noted covers 120 hours at $35 per hour plus an additional 20% load for payroll-related costs; the 120 hours will be used in a combination of part-time and full-time assignments before opening for licensure preparation and readiness activities conducted (approximately 300 hours will be needed for you to complete the licensure process, of which approximately 120 of those hours will require a RN for clinical standards readiness) part-time as well as attending training and participating in surveys full-time.

NOTE 11. CPA to certify Licensure Submission. This estimate will vary depending on your financial acumen.

NOTE 12. Insurance Excluding Workers Comp. The estimate in the table above represents your estimated insurance costs (excluding workers comp) for the first 3 months you operate your Agency. Your estimated yearly insurance costs (excluding workers comp) during year 1 will range from $3,850 – $5,440, paid either by lump sum payment or finance premiums on monthly installments depending upon provider selected. We disclose required insurance coverage in Item 6.

NOTE 13. Workers Comp Insurance. The estimate in the table above represents your estimated workers comp for the first 3 months you operate your Agency. Your estimated yearly workers comp costs during year 1 will range from $2,228 – $14,416, subject to audit at the end of the policy term and variable depending on the state in which your territory is located and concurrent market conditions..

NOTE 14. CSA (Certified Senior Advisor) Training and Certification. The estimate in the table above reflects the fees for CSA training and certification. This fee may vary between $895 and $1595 depending on discounts offered throughout the year. If you attend CSA training and certification in person, you are responsible for paying all travel costs and expenses.

NOTE 15. Employee Travel and Living Expenses Associated with Training. These expenses should average $130 per day per person in attendance. The amount may vary based on the type of accommodations you select, dining preferences, travel preference, and differences in compensation arrangements with your employees while the employee is being trained.

NOTE 16. Legal Fees. The estimate in the table above reflects the fees for review of BrightStar employment templates and customer contract templates for any necessary modifications required by local and state law.

NOTE 17. Additional Operating Funds. The estimate for additional operating funds contained in the table above reflects the period through the end of 3 months after opening your Agency. With increased difficulty in accessing credit, we recommend having additional working capital on-hand. Specifically, we estimate you will need approximately $124,284 to $326,644 in total additional operating funds for the first 12 months you operate the Agency, without factoring the amount of gross margin that would reduce this amount.

The additional funds we estimate you may need will vary considerably among our franchisees based on a variety of factors, including the number of employees you choose to hire and the salary and other benefits you choose to pay; the extent you will be actively involved in operations; your skill, experience, business acumen and credit-rating; local competition; local economic conditions, including rent and wage scales and the cost of supplies; and the actual sales levels you reach during the initial 3-month period. Operating expenses include payroll expenses for all opening employees but do not include any allowance for a draw or salary to you or other owners of the franchise. Operating expenses also include expenses like client satisfaction survey ($125/qtr. plus $2.50 per client surveyed); Local Advertising spend (greater of 0.5% of monthly Net Billings or $500 monthly); minimum monthly recruiting spend ($500); telephone charges (landline and DSL $150 – $400/ month, cellular telephone service ($150-$225/mo. for 3 phones – BrightStar has negotiated discounts with Verizon Wireless and with AT&T), BrightStar has also negotiated discounts for mobile devices used by staff/caregivers, credit card processing (current interchange cost plus 10 basis points; approximately $75 – $166 / mo.), payroll processing fees (approximately $5/person/mo. on weekly basis; $40-$130/mo. depending on number of employees.), IT services/hardware and accessory support ($50-$150/mo. depending on personal IT knowledge), drug screening ($130-$260/mo. based on 2-4 employees per week), background check/screening ($130-$258/mo. based on 2-4 employees per week and does not include fingerprinting, ), infringement restitution (paid directly to franchisee calculated on Gross Margin less royalties as calculated through ABS plus penalty),office supplies ($25 per person per month), , and accounting services. Amounts for General Marketing and system fees and email fees are included since these fees begin the earlier of 120 days from the signing of the Franchise Agreement or the Opening Date.

The additional funds category is not the only source of cash but is in addition to cash flow from operations. The figures we show do not include an allowance for payments of royalty fees. We do not project what your actual revenue or Net Billings will be. However, you should allow for these fees and expenses when you make your own calculations of the additional funds you will need as working capital. The additional

The additional funds category does not include any allowance for payments made to a bank or financing company on any loan you may obtain to finance the cost of purchasing the franchise or other development-related costs.

NOTE 18. Additional Operating Funds – Employee Related Expenses. The employees you need to hire will vary based upon state licensure and your skill set. You must devote full-time involvement in the business for the first 2 years from the Opening Date and implement one of the 4 organizational model options specified in the Operations Manual. Your or your owners’ salaries are excluded from the amounts needed in the first year, as it is expected that you or your owners will not draw a salary until year 2 or thereafter. The 4 organizational models are:

  1. You (or your owner) as salesperson operating in a state where a part-time licensed registered nurse (RN) is permitted for licensure purposes and you hire a branch manager and a salary range of $50,000-$60,000 annually (base salary) [this is the lowest cost organizational model];
  2. You (or your owner) as Operations Manager/branch manager in a state where a part-time licensed registered nurse (RN) is permitted for licensure purposes and you hire a full-time salesperson;
  3. You (or your owner) as salesperson in a state where a full-time licensed registered nurse (RN) is required for licensure purposes and you also hire an experienced director of operations at $50,000-$80,000 annually (base salary) [this is the highest cost organizational model]; and
  4. You (or your owner) as Operations Manager/branch manager in a state where a full-time licensed registered nurse (RN) is required for licensure purposes and you hire a full-time salesperson.

The total 3-month range of organizational structure costs during the start-up period ranges from $19,329 to $48,960 or $6,443 to $16,320 per month, depending on the pay rates negotiated. The 4 operational models anticipate you will use our recommended accounting firm or another firm with similar experience and not hire a finance manager during year one. Should you wish to hire an operations manager to oversee the day-to-day operations after the first 2 years, you must submit a written request and obtain written approval from us.

You must hire and maintain a full-time salesperson for each territory with up to 400,000 in population. If you acquire a territory via a transfer with more than 400,000 in population, an additional salesperson is required for each additional 250,000 (or portion thereof) in population.

We relied upon our franchisees’ experiences in opening and operating their BrightStar Agencies in preparing these estimates. Your actual costs may vary significantly from the estimates provided in this Item 7. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. These Item 7 charts are intended strictly as an estimate of your initial start-up expenses. Applicable law requires us to make this disclosure. We cannot guarantee you will not have additional expenses, or other categories of expenses, to start the franchised business. These additional expenses and other categories of expenses could be significant and materially and adversely impact your business. No provision has been made for capital or other reserve funds necessary for you to reach “break-even” or any other financial position. You should not plan to draw income from operations during the start-up and development stage of your franchise, which may be a period exceeding the 3-month “initial phase” responsive to the franchise disclosure laws. You should therefore plan to have reserves, either in cash or through a bank line of credit or have other assets which you may liquidate or against which you may borrow, to cover other expenses, losses, or unanticipated events during the start-up and development stage or beyond.