If a Best Western member resigns, what are they obligated to pay?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Furthermore, if a Member resigns from the Membership (which it, he, or she may do at any time) or this Agreement is cancelled or terminated by Best Western, the following are immediately due and payable to Best Western:
- a. Resignation, Cancellation or Termination: Upon a resignation, cancellation or termination, the Member shall pay to Best Western:
- (i) Monthly Fees. The lesser of: (x) thirty-six (36) months of Monthly Fees (calculated as the Member's average Monthly Fees during the previous twelve (12) months (but if Monthly Fees have been owed to Best Western for less than twelve (12) months, the average of all prior months) multiplied by thirtysix (36)); or (y) Monthly Fees for the remainder of the Extended-Length Term or Renewal Term (calculated as the Member's average Monthly Fees during the previous twelve (12) months multiplied by the number of months remaining in the Extended-Length Term or Renewal Term); and
- (ii) Goods and Services. The cost of all goods and services provided by or ordered through Best Western for which payment has not yet been received.
- b. Continued Operation as a "Best Western" after Resignation, Cancellation or Termination: In the event that the Property continues to operate as a "Best Western" after resignation, cancellation or termination of this Agreement, in addition to the amount due as noted in paragraph F.4.a, the former Member shall pay full fees, dues, charges, and assessments as the former Member would have been required to pay if still a Member until the Property ceases operation as a "Best Western."
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- It is understood and agreed that the amounts described in section F.3 and F.4 are fixed as liquidated damages and not as penalties because of the difficulty of ascertaining the exact amount of damages that may be sustained by Best Western as a result of such resignation, cancellation, or termination. It is further understood and agreed that such amounts fixed as liquidated damages represent a reasonable amount considering the damages that Best Western will sustain from the Member resigning or this Agreement being cancelled or terminated.
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- The rights provided in this section F shall be exercised solely at the option of Best Western.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, if a member resigns from the membership, they are obligated to pay certain fees to Best Western. Specifically, they must pay the lesser of two amounts regarding monthly fees: either 36 months of monthly fees calculated as the average of the previous 12 months, or the monthly fees for the remainder of the Extended-Length Term or Renewal Term, again calculated using the average of the previous 12 months. Additionally, the member must cover the cost of all goods and services provided by or ordered through Best Western for which payment has not yet been received.
Furthermore, if the property continues to operate as a "Best Western" after the resignation, the former member is obligated to pay full fees, dues, charges, and assessments as if they were still a member. This obligation continues until the property ceases to operate as a Best Western. These amounts are considered liquidated damages rather than penalties due to the difficulty in determining the exact damages Best Western might sustain as a result of the resignation.
It's important to note that Best Western retains the right to exercise these rights at its discretion. This means that Best Western can choose whether or not to enforce these payment obligations upon a member's resignation. This provides Best Western with flexibility in handling resignations based on the specific circumstances. Prospective franchisees should be aware of these potential financial obligations and consider them carefully before joining the Best Western system.