What do the other long-term assets of Americas Best Value Inn primarily consist of?

According to the 2025 FDD, Americas Best Value Inn's other long-term assets primarily consist of key money arrangements with certain franchisees and contract assets. Key money paid when entering into long-term franchise agreements is recognized as other long-term assets on the consolidated balance sheets. This amount is then amortized as a reduction of revenue over the term of the franchise agreements.

The portion of these costs that will be amortized over the following 12 months are classified as prepaid expenses and other current assets on the consolidated balance sheets. This means that the key money is initially recorded as a long-term asset, and as it is used up over the life of the franchise agreement (typically longer than one year), the portion applicable to the next 12 months is reclassified as a current asset.

For a prospective Americas Best Value Inn franchisee, this indicates that a portion of their initial investment, specifically the key money, is treated as an asset by the franchisor and is gradually recognized as revenue reduction over the term of the agreement. This accounting treatment can affect the franchisor's reported financial performance and should be considered when evaluating the financial stability and practices of Americas Best Value Inn.