When is the credit for Best Western's BWR points redeemed for a Pay with Points stay credited?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
Best Western Rewards® frequent stay program ("BWR® program")
The Company administers the BWR program for the benefit of BWH and BWR program members. Under our BWR program, the Company has a performance obligation to provide or arrange for the provision of goods or services between BWR program members and BWH hotels in exchange for the redemption of points earned from past activities. Costs of operating the BWR program, including costs for marketing, promotion, and other member services, are charged to the BWH hotels through an assessment fee that is based on members' qualified expenditures. The assessment fees received from BWH hotels are deferred and recognized as program revenues in the Consolidated Statements of Revenues and Expenses as the loyalty points are redeemed and the related service, net of redemption expense, is provided. The amount of revenue the Company recognizes upon point redemption is impacted by the Company's estimate of the breakage for points that BWR members will never redeem. The Company estimates breakage based on historical experience and expectations of future BWR member behavior, including analyses performed by and input of third-party actuaries. All BWR program costs are recognized as incurred and are recorded in program cost of sales in the Consolidated Statements of Revenues and Expenses.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
Based on the 2025 Best Western Franchise Disclosure Document, the timing of when a Best Western property receives credit for BWR points redeemed for a Pay with Points stay is not explicitly detailed in the provided excerpts. However, the FDD does mention how Best Western recognizes revenue related to the Best Western Rewards program.
The FDD states that Best Western has a performance obligation to provide goods or services between BWR program members and BWH hotels in exchange for the redemption of points earned from past activities. The assessment fees received from BWH hotels are deferred and recognized as program revenues as the loyalty points are redeemed and the related service, net of redemption expense, is provided. This indicates that revenue recognition, and therefore the crediting of points, is tied to the actual redemption of points by BWR members.
To fully understand the crediting process, a prospective Best Western franchisee should inquire with the franchisor about the specific accounting procedures and timelines involved in crediting properties for BWR points redeemed under the Pay with Points program. This will help clarify when and how the financial impact of these redemptions is reflected in the property's financial statements.