8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT PURSUANT TO SECTION

13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 4, 2006 (December 30, 2005)

FIVE STAR QUALITY CARE, INC.

(Exact Name of Registrant as Specified in Its Charter)

            Maryland            

(State or other jurisdiction

of incorporation)

Commission File No. 1-16817      04-3516029     
(IRS Employer
Identification No.)

     400 Centre Street, Newton, Massachusetts     
(Address of Principal Executive Offices)           02458          
(Zip Code)

Registrant’s telephone number, including area code: (617) 796-8387

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item8.01. Other Events.

On December 30, 2005, we reached an agreement with Sunrise Senior Living Services, Inc., or Sunrise, to terminate one long term management agreement for a community located in Florida that Sunrise manages for us, as more fully described in the copy of our press release attached hereto as Exhibit 99.1 which is incorporated herein by reference.

The terms of our management agreements with Sunrise are more fully described in the section titled “Item 2. Properties – Sunrise Senior Living Services, Inc. Management Agreements” in our Annual Report on Form 10-K for the year ended December 31, 2004, which part of such filing we incorporate by reference into this Item 8.01.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

99.1. Press Release dated January 3, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

FIVE STAR QUALITY CARE, INC.

By: /s/ Bruce J. Mackey Jr.                    

Name: Bruce J. Mackey Jr.

Title: Treasurer and Chief Financial Officer

Date: January 4, 2006

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact:

Timothy A. Bonang

Manager of Investor Relations

(617) 796-8387

www.fivestarqualitycare.com

Five Star and Sunrise Reach Agreement on

Termination of an Additional Management Contract

Newton, MA (January 3, 2006): Five Star Quality Care, Inc. (AMEX: FVE) announced today that it reached agreement with Sunrise Senior Living Services, Inc., or Sunrise, to terminate one long term management agreement for a community located in Florida that Sunrise manages for Five Star. This senior living community has 281 living units, including 184 independent living apartments, 62 assisted living suites and 35 skilled nursing units. This contract termination is in addition to the 12 contract terminations which became effective November 1, 2005.

The agreement announced today provides for a termination fee of $4.75 million to be paid to Sunrise and an effective date of February 1, 2006. Five Star will report this termination fee as an expense in its income statement for the quarter ended December 31, 2005. Five Star expects to fund this termination fee by drawing under its bank credit facility. After the management agreement with Sunrise has been terminated, Five Star will manage this community and will no longer pay management fees for this community to Sunrise. Following the termination, Sunrise will continue to manage 17 other communities for Five Star.

Five Star Quality Care, Inc. owns, leases, manages and operates senior living communities which offer independent living apartments, assisted living accommodations and skilled nursing services in 155 senior living communities with over 17,000 living units, located in 28 states. Five Star also owns and operates five institutional pharmacies. Five Star is headquartered in Newton, Massachusetts.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND FEDERAL SECURITIES LAWS. THESE STATEMENTS REFLECT FIVE STAR’S INTENT, BELIEF OR EXPECTATION, BUT THEY ARE NOT GUARANTEED TO OCCUR. FOR EXAMPLE, THE IMPLICATION OF VARIOUS STATEMENTS IN THIS PRESS RELEASE IS THAT FIVE STAR MAY BE ABLE TO OPERATE THE COMMUNITY FOR WHICH SUNRISE’S MANAGEMENT HAS BEEN TERMINATED AS WELL AS SUNRISE AND SOME OR ALL OF THE MANAGEMENT FEE PREVIOUSLY PAID TO SUNRISE WILL ACCRUE TO FIVE STAR’S OPERATING PROFITS. HOWEVER, THE TERMINATION OF

THE MANAGEMENT AGREEMENT WITH SUNRISE MAY NOT IMPROVE FIVE STAR’S FINANCIAL RESULTS OR MAY CAUSE IT TO EXPERIENCE OPERATING LOSSES. THE OPERATING AND FINANCIAL PERFORMANCE OF THIS COMMUNITY WHICH IS THE SUBJECT OF THE MANAGEMENT AGREEMENT MAY DETERIORATE BEFORE FIVE STAR ASSUMES THE OPERATIONS. ALSO, AFTER IT ASSUMES THE OPERATIONS, FIVE STAR MAY BE UNABLE TO OPERATE THIS COMMUNITY FOR ITS OWN ACCOUNT IN A MANNER WHICH IS AS PROFITABLE AS, OR MORE PROFITABLE THAN, IT HAS BEEN OPERATED BY SUNRISE. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON FIVE STAR’S PRESENT EXPECTATIONS, BUT THESE STATEMENTS AND THE IMPLICATIONS OF THESE STATEMENTS MAY NOT OCCUR. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON THESE FORWARD LOOKING STATEMENTS.

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