What must be concluded regarding Best Western's ability to continue as a going concern when evaluating their financial statements?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
To the Board of Directors and Members of Best Western International, Inc.
Opinion
We have audited the consolidated financial statements of Best Western International, Inc. (the Company), which comprise the consolidated statements of financial position as of November 30, 2024 and 2023, and the related consolidated statements of revenues and expenses, other comprehensive revenues and expenses, cash flows and changes in net assets for the years then ended, and the related notes (collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company at November 30, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are available to be issued.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the independent auditor, Ernst & Young LLP, has audited the consolidated financial statements of Best Western International, Inc. as of November 30, 2024 and 2023. These statements include the financial position, revenues, expenses, cash flows, and changes in net assets for the years then ended. Ernst & Young's opinion is that these financial statements present fairly, in all material respects, the financial position of Best Western as of those dates, and the results of its operations and cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America.
The auditor's opinion is based on audits conducted in accordance with auditing standards generally accepted in the United States of America (GAAS). These standards require the auditor to be independent and to meet ethical responsibilities. The auditor believes that the audit evidence obtained is sufficient and appropriate to provide a basis for their audit opinion. Management is responsible for preparing the financial statements, maintaining internal control, and evaluating whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern for one year after the date the financial statements are available to be issued.
In summary, the independent auditor's report indicates that Best Western's financial statements are fairly presented and in compliance with accounting principles generally accepted in the United States of America. This suggests that, based on the information available to the auditor, there is no substantial doubt about Best Western's ability to continue as a going concern for at least one year after the financial statements were issued. This is a positive indicator for prospective franchisees, as it suggests financial stability and operational continuity for Best Western.