When is revenue relating to points and free night certificates recognized by Atwell Suites?

According to Atwell Suites' 2025 Franchise Disclosure Document, revenue related to points and free night certificates is recognized when the member uses the points or certificates at a participating hotel. Revenue is also recognized when a member selects a reward from a third party. In both instances, the revenue recognized is net of the cost of reimbursing the hotel or third party providing the benefit.

This means that Atwell Suites recognizes revenue from its loyalty program (IHG One Rewards) only when the benefits are actually redeemed by the members. The brand does not recognize revenue when the points or certificates are initially issued. This approach aligns revenue recognition with the actual consumption of the benefits, which is a common practice in the hospitality industry.

For a prospective franchisee, this accounting practice means that the initial sale of points or certificates does not immediately translate into recognized revenue for Atwell Suites. Instead, revenue is deferred until the benefits are used. This delay in revenue recognition could impact the franchisee's financial statements, particularly in the early stages of operation when a significant number of points or certificates may be issued but not yet redeemed. Franchisees should understand the timing of revenue recognition to accurately assess their financial performance and manage their cash flow.