BrightStar Care

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# BrightStar Care Franchise Research Report

## 1. Executive Summary

BrightStar Care is a mature home health care franchise with over 400 locations that differentiates itself through clinical oversight (RN-managed care) and dual revenue streams from both private-pay home care and medical staffing. The system shows solid average unit volumes (~$2.4M) and has attracted private equity investment from Peak Rock Capital in March 2025, signaling confidence in the brand's trajectory. However, prospective franchisees should carefully examine the tiered royalty structure on National Accounts, recent litigation over contract terms, and the industry-wide labor challenges that define home care operations.

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## 2. The Business

**Business Model:** BrightStar Care franchisees operate agencies providing three revenue streams: non-medical companion/personal care, skilled medical home health services, and supplemental healthcare staffing to institutional clients (hospitals, nursing homes, clinics). This multi-service model allows franchisees to capture both private-pay and insurance-reimbursed revenue while serving as a staffing vendor to healthcare facilities.

The clinical differentiation is significant: BrightStar requires a Registered Nurse to manage every case regardless of whether state licensing mandates it. This positions the brand as premium in the home care space and enables delivery of skilled nursing services that competitors like Comfort Keepers and Home Instead cannot offer.

**Target Customer:** - Seniors and adults requiring in-home assistance (companion care, personal care, skilled nursing) - Families seeking respite care or post-surgical recovery support - Healthcare facilities needing supplemental staffing solutions - Veterans (through VA contracts) - Pediatric clients requiring specialized home care

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## 3. The Numbers

**Initial Investment Range:** $132,499 - $235,038 (per 2024 FDD)

**Franchise Fee:** $25,000 - $50,000

**Royalty Structure:** - 5.25% of monthly Net Billings from non-National Accounts - 6.25% of monthly Net Billings from National Accounts - This tiered structure is a point of friction with some franchisees

**Marketing Fee:** $500/month or 2.5% of previous month's Net Billings (whichever is greater)

**Technology Fee:** $250/month or 0.83% of previous month's Net Billings (whichever is greater)

**Average Unit Volume (2024 FDD Item 19):** - Combined average revenue: $2,432,014 for first locations open 12+ months - Average National Account revenue: $888,265 - This represents growth from 2023's combined average of $2,379,701

**Estimated Earnings:** $359,458 - $499,247 per unit (based on VettedBiz analysis)

**Payback Period:** 1.4 - 3.4 years

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## 4. System Health

**Unit Count:** - 400+ locations nationwide as of late 2024 - Estimated 410-420 units currently operating - Ranked #110 on Franchise Times Top 400 (2024) - Ranked #189 on Entrepreneur Franchise 500 (2025), up nearly 100 positions from prior year

**Growth Trajectory (2025):** - Opened 30+ new locations - Added 20 new franchise owners - Existing owners expanded into 21 additional markets

**Attrition Rate:** Approximately 5.96% historically, which is below the Health & Fitness industry average of 7%

**Ownership Change:** Peak Rock Capital completed acquisition of BrightStar Group Holdings in March 2025. Founder Shelly Sun Berkowitz remains as Executive Chairwoman. The PE firm has committed to investing in technology, marketing, and growth initiatives to support franchisees.

**Senior Living Challenges:** BrightStar's expansion into senior living/assisted living franchises has faced significant headwinds. Original plans for 100 communities by 2020 did not materialize due to construction financing challenges, high upfront costs ($6-10M vs. $150K for home care), and workforce recruitment difficulties.

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## 5. Franchisee Experience

**Satisfaction Metrics:** - 97% of franchisees would recommend the brand to other candidates - Named to Franchise Business Review "Hall of Fame" for 10 consecutive years - 94%+ of franchisees report the franchisor acts with high honesty and integrity - Outperformed industry benchmarks by 28% in Training & Support category

**Common Complaints and Concerns:**

1. **National Accounts Program:** Franchisees have complained that the corporate office designates large referral sources (such as VA contracts) as "National Accounts," which increases royalties by 20% on those accounts without adding proportional value.

2. **Field Support Quality:** Field coaches described as non-responsive and lacking operational agency experience.

3. **Conference Attendance Policies:** Reports of franchisees being fined for missing mandatory conferences due to family emergencies, suggesting inflexibility in corporate policies.

4. **Software Issues:** Franchisees in Arizona filed a misrepresentation lawsuit alleging the software provided falls short of promises made during the sales process.

**Employee/Caregiver Sentiment (Glassdoor):** - Overall rating: 3.4/5 (declining 5% over past 12 months) - 63% would recommend working there - Common complaints: pay not meeting expectations, high corporate turnover, communication inconsistencies - Work-life balance: 3.4/5; Career opportunities: 3.1/5

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## 6. Risk Assessment

**Litigation Disclosed in FDD:**

1. **2022 Call Option Lawsuit:** Three California franchisees (BrightStar Owners Association) sued over a new "call option" provision in the 2022 FDD. Plaintiffs characterized it as a "poison pill" that reduces franchise value and potentially makes units unsellable. BrightStar defended it as an exit mechanism with fair pricing premiums.

2. **2025 Post-Termination Dispute:** BrightStar obtained a preliminary injunction against former franchisees (Foreside Management Company) who allegedly continued operating a competing home care business after their agreements expired, retaining customers and phone numbers.

3. **Historical Disclosure Issues:** Analysis of FDDs from 2011-2014 found that several lawsuits were not listed in the franchisor's disclosure documents.

**Red Flags to Consider:**

- **Tiered royalty structure** that increases costs on National Account business—franchisees have limited control over which accounts become designated National Accounts - **FDD discloses litigation and/or bankruptcy information** that warrants careful review - **Private equity ownership** introduces uncertainty about future operational changes, cost-cutting, or strategic pivots - **Industry-wide labor crisis:** 77% annual caregiver turnover nationally; 4.6 million projected unfulfilled jobs by 2032 - **Call option provision** could limit exit options and franchise resale value

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## 7. Competitive Position

**Key Competitors:** - Home Instead (non-medical personal care only; larger global footprint) - Comfort Keepers (non-medical care + in-home monitoring technology) - Senior Helpers - BAYADA Home Health Care

**BrightStar's Differentiation:** 1. **Clinical model:** RN oversight on every case (unique among major competitors) 2. **Skilled + non-skilled care:** Can serve higher-acuity clients that competitors cannot 3. **Medical staffing revenue stream:** Diversifies income beyond private-pay home care 4. **Joint Commission accreditation:** Earned Enterprise Champion for Quality Award 13 consecutive years

**Weaknesses vs. Competitors:** - Higher complexity requiring clinical staff recruitment - Premium pricing may limit market reach in price-sensitive areas - Competitors like Home Instead have larger international presence - Comfort Keepers (owned by Halifax Group) and BrightStar (now Peak Rock) both under PE ownership, creating uncertainty about long-term strategic direction across the sector

**Market Position:** Mid-tier franchise investment with above-average unit economics, positioned as the "clinical" option in a mostly non-medical competitive set.

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## 8. Validation Questions for Prospects

1. **National Accounts Impact:** "What percentage of your revenue comes from National Accounts, and how has the designation of accounts as 'National' affected your profitability?"

2. **Field Support Quality:** "How responsive is your field coach, and do they have direct experience operating a BrightStar agency?"

3. **Caregiver Recruitment:** "What is your annual caregiver turnover rate, and what recruiting strategies have been most effective in your market?"

4. **Technology/Software:** "Does the proprietary software meet your operational needs, or have you needed to supplement with third-party tools?"

5. **Exit/Resale Considerations:** "Are you aware of the call option provisions, and how do you view the resale market for BrightStar franchises in your area?"

6. **Peak Rock Transition:** "Have you noticed any changes in corporate support, fees, or strategic direction since the Peak Rock Capital acquisition?"

7. **Profitability Timeline:** "How long did it take you to reach consistent profitability, and what was your path to achieving the system average revenue?"

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## 9. Data Gaps

The following information could not be confirmed through available sources:

1. **Detailed FDD Item 20 data:** Specific annual closure counts, terminations, and transfers for 2021-2024 were not publicly available 2. **Franchise Grade numerical score:** While BrightStar Senior Living earned "Made The Grade" designation, the specific numerical grade for the core BrightStar Care brand was not disclosed 3. **Current litigation status:** Outcome of the 2022 California call option lawsuit is unclear 4. **Post-acquisition changes:** Too early to assess operational or financial impacts of Peak Rock Capital ownership 5. **Territory size/population requirements:** Specific protected territory parameters not confirmed 6. **Multi-unit discount structures:** Fee variations for franchisees opening additional units not detailed 7. **Breakeven analysis:** Time to breakeven by market size or region not available 8. **Item 19 median figures:** Only averages disclosed; median revenue and profit distribution across franchisees would provide clearer performance picture

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**Report Date:** February 4, 2026

**Disclaimer:** This report is based on publicly available information and web research. Prospective franchisees should obtain and thoroughly review the current Franchise Disclosure Document and consult with a franchise attorney before making investment decisions.