What is the Best Western Board's role in establishing fees, dues, and assessments?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
ed based upon the number of months remaining in the Extended-Length Term.
- (2) For applications approved by the Board on and after January 1, 2018. Any Member or contingentlyapproved Applicant may resign from the Corporation at any time; but, if the Member resigns or is terminated, all fees, dues, and charges (to include liquidated damages) become immediately due and payable as detailed in the Membership Agreement. In addition, an Extended-Length Member shall pay to the Corporation a pro-rata amount of any Development Incentive received based upon the number of months remaining in the Extended-Length Term.
Section 6. Fees and Dues
- (A) The Board shall establish Entrance Fees to be paid by Applicants. Such Entrance Fees may be changed by the Board from time to time, but cannot be waived. The exception to this limitation is the offering and acceptance of a Development Incentive.
- (B) The Board shall establish Annual Dues to be paid by Members eligible for continuing Memberships. Annual Dues shall be established by the Board during each fiscal year for the succeeding fiscal year.
- (C) The Board shall establish Monthly Fees designed to cover the cost of providing services to Members. Monthly Fees for Members approved by the Board on or after January 1, 2018, shall be as determined by the Board annually, prior to the following fiscal year; however, if a Member has or Members collectively have a minimum of a fifty percent (50%) financial ownership interest in the Applicant Best Western Property at the time of the Board's application approval, the Monthly Fees shall be three and one-half percent (3 ½%) of Property Room Revenue. For the purpose of an Applicant being eligible for a Monthly Fee of three and one-half percent (3 ½%) of Property Room Revenue, the Members or Members must have each and all been a Member as of July 1, 2016.
- (D) Annual Dues, Monthly Fees, and assessments may be increased by the Board no more often than once in each fiscal year.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the Board of Directors plays a significant role in establishing and adjusting the various fees, dues, and assessments that members are required to pay. The Board is responsible for setting the Entrance Fees paid by new applicants, and these fees can be changed by the Board over time, although they cannot be waived, except in the case of a Development Incentive. The Board also establishes the Annual Dues for members eligible for continuing memberships, setting these dues each fiscal year for the succeeding fiscal year.
Furthermore, the Best Western Board sets the Monthly Fees designed to cover the costs of providing services to members. For members approved on or after January 1, 2018, the Board determines these fees annually before the following fiscal year. However, a specific condition applies if a member (or members collectively) has at least a 50% financial ownership in the applicant Best Western property at the time of the Board's approval; in that case, the Monthly Fees are set at 3.5% of Property Room Revenue, provided the members were members as of July 1, 2016.
The Board has the authority to increase Annual Dues, Monthly Fees, and assessments, but can only do so once per fiscal year. Any such annual increase is capped at the lesser of 5% or the rate of inflation for the previous year, as measured by the United States Bureau of Labor Statistics Consumer Price Index. A larger increase requires approval by a majority vote of all members. This limitation on monthly fee increases does not apply to members who pay monthly fees as a percentage of Property Room Revenue. The advertising assessment, effective December 1, 2024, is $16.39 per room per month, and the Board can increase this assessment once each fiscal year, with the increase limited to the greater of 2% of the prior year's assessment or the rate of inflation.
For a prospective Best Western franchisee, it is crucial to understand the Board's authority over these fees and the potential for annual increases. Franchisees should also take note of the conditions under which their monthly fees might be calculated as a percentage of Property Room Revenue, as this could significantly impact their operating costs. Additionally, understanding the limitations on fee increases and the process for larger increases requiring member approval can provide some level of financial predictability.