What was the gross carrying amount of the WorldHotels amortizing goodwill for Best Western?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
the excess was assigned to goodwill.
The Company assessed the qualitative factors attributable to the AC reporting unit and determined that the fair value of the reporting unit is not more likely than not less than its carrying amount as of August 31, 2023 and 2022. Therefore, no quantitative analysis was performed and no impairment was recorded for the years ended November 30, 2023 and 2022.
Amortized goodwill and other intangible assets consisted of the following:
| (in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amou
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the gross carrying amount of the WorldHotels amortizing goodwill was $4,554,000 as of November 30, 2024. This goodwill is subject to amortization, meaning its value is systematically reduced over its useful life, which Best Western has elected to be 10 years. The accumulated amortization for WorldHotels was $(1,750,000), resulting in a net carrying amount of $2,804,000.
Goodwill typically arises from the acquisition of another company, representing the excess of the purchase price over the fair value of identifiable net assets acquired. In Best Western's case, this goodwill is associated with the WorldHotels acquisition. The amortization expense for goodwill, including WorldHotels, was approximately $0.8 million for the years ended November 30, 2024 and 2023, and is estimated to remain around $0.8 million annually for fiscal years ending 2025 through 2028.
For a prospective Best Western franchisee, understanding the amortization of goodwill is important as it reflects how the value of acquired entities like WorldHotels is being accounted for over time. While it doesn't directly impact the franchisee's day-to-day operations, it provides insight into Best Western's financial strategies and the long-term value it places on its acquisitions. Monitoring these figures can help franchisees assess the financial health and stability of the Best Western organization.