For a Best Western franchise, what is the estimated range for 'Additional Funds (3 months)' and when is this payment due?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 7: Estimated Initial Investment]
| Type of Expenditure | Amount | Method of Payment | When Due | To Whom Payment is to be made |
|---|---|---|---|---|
| $45,000 (50 rooms or less) plus $200 for each additional room up to 1,000 rooms) | portion before Board’s consideration of Application of Membership | |||
| Proposed Construction | $0 - $35,000 | Lump Sum | When | Us |
| Extension Fee (3) | Requested | |||
| Opening Date Extension | $0 - $15,750 | Lump Sum | When | Us |
| Fee (4) | Requested | |||
| Distribution System | $1,150 - $8,000 | Lump Sum | As Required | Us |
| Photographs Fee (5) | ||||
| Construction Work (6) | $13,545,000 - $26,250,000 | As Agreed | As Agreed | Contractors |
| Furniture, Fixtures and | $2,415,000 - | As Agreed | As Agreed | Suppliers |
| Equipment (7) | $4,725,000 | |||
| Inventory and Operating | $210,000 - | As Agreed | As Agreed | Suppliers |
| Equipment (8) | $367,500 | |||
| Signage (9) | $21,000 - $47,250 | As Agreed | As Agreed | Suppliers |
| Computer System (10) | $152,595 - $153,995 | Cash, Check or Wire Transfer | As Required | Us and Suppliers |
| Insurance (11) | $7,500 - $12,500 | As Required | As Required | Agent/Insurer |
| Organizational Expense | $1,050 - $2,100 | As Required | As Agreed | Accountant/Attorney |
| (12) | ||||
| Permits and Licenses (13) | $52,500 - $183,750 | As Required | As Required | Governmental Agency |
| Initial Training Fees | $420 - $2,200 | As Required | As Required | Us or our affiliates |
| Miscellaneous | $26,250 - $78,750 | As Incurred | As Agreed | Suppliers |
| Preopening and Project | ||||
| Management Expenses | ||||
| (15) | ||||
| Additional Funds | $499,800 - | As Incurred | As Arranged | Suppliers |
| (3 months) (16) | $544,950 | |||
| TOTAL (17) | ||||
| $16,995,265 - $32,493,745 |
Source: Item 7 — Estimated Initial Investment (FDD pages 37–61)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the estimated initial investment for additional funds for a period of three months ranges from $270,000 to $544,950, depending on the Best Western brand. These funds are intended to cover expenses that may arise during the initial months of operation. The method of payment is 'As Incurred,' and the payments are due 'As Arranged' with suppliers.
These additional funds are paid to suppliers and cover a variety of costs necessary to run the Best Western hotel. These costs can include, but are not limited to, operational equipment, inventory, and potentially unforeseen expenses. The wide range suggests that the actual amount needed can vary significantly based on factors such as the hotel's location, size, and the specific Best Western brand.
Prospective franchisees should carefully consider their financial resources and develop a detailed budget to ensure they have sufficient capital to cover these additional funds. It is advisable to consult with existing Best Western franchisees and financial advisors to gain a more accurate understanding of the potential costs involved in their specific market and circumstances. Understanding these costs will help ensure a smoother launch and operation of the Best Western franchise.