What was the value of the Baymont Inn Suites trademarks at the end of the period?
Baymont_Inn_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
nues | 60 | 25 | 10 | 2 | 97 | | Co-branded credit card program revenues | 22 | — | — | — | 22 | | Other revenues | 22 | 1 | — | 3 | 26 | | Total | $ 121 | $ 34 | $ 17 | $ 118 | $ 290 |
Disaggregation of Net Revenues
The table below presents a disaggregation of the Company's net revenues from contracts with customers by major services and products for each of the Company's segments:
| Year Ended December 31, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2022 | ||||
| (a) | ||||||
| Hotel Franchising | ||||||
| Royalties and franchise fees | $ 555 | $ 532 | $ 496 | |||
| Marketing and reservation fees | 467 | 487 | 457 | |||
| Loyalty revenue | 96 | 91 | 86 | |||
| Management and other fees | 10 | 14 | — | |||
| License and other fees | 119 | 112 | 100 | |||
| Cost reimbursements | 4 | 13 | — | |||
| (b) | 157 | 148 | 138 | |||
| Oth |
Source: Item 23 — RECEIPTS (FDD pages 97–443)
What This Means (2025 FDD)
According to Baymont Inn Suites's 2025 Franchise Disclosure Document, the company capitalizes certain contract costs, including sales commissions for obtaining hotel franchise contracts. These costs are amortized over the initial non-cancellable period of the agreement, starting when the hotel opens. If an agreement terminates early, any unamortized cost is immediately expensed. Additionally, Baymont Inn Suites capitalizes costs related to the sale and installation of property management systems for its franchisees, amortizing these over the remaining non-cancellable period of the franchise agreement. As of December 31, 2024, capitalized contract costs totaled $76 million, with $5 million included in other current assets and $71 million in other non-current assets. For the previous year, as of December 31, 2023, these costs were $68 million, with $4 million in other current assets and $64 million in other non-current assets.
These figures reflect Wyndham Hotels & Resorts, Inc.'s capitalized contract costs, which include Baymont Inn Suites. For a prospective franchisee, this indicates the scale of investment Wyndham makes in securing and supporting franchise agreements. The amortization of these costs means that the initial franchise term is critical for recouping these investments. If a franchisee were to terminate their agreement early, any unamortized portion of these costs would be immediately expensed, impacting the company's financial statements.
The capitalized contract costs also include investments in property management systems, which are essential for franchisees to operate efficiently. The amortization of these costs over the franchise agreement's term suggests that Baymont Inn Suites views a long-term relationship with its franchisees as crucial for realizing the value of these investments. This approach aligns the franchisor's success with the franchisee's long-term performance, incentivizing support and resources to ensure franchisee success. However, the FDD does not explicitly state the valuation of the Baymont Inn Suites trademarks themselves.
While the FDD details capitalized contract costs, it does not provide a specific valuation for the Baymont Inn Suites trademarks. A prospective franchisee may want to inquire directly with the franchisor about the valuation of the trademarks and how it is determined, as this could provide further insight into the brand's strength and market value.