What is included in the Current Liabilities section of the Best Western balance sheet?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
| LIABILITIES AND NET ASSETS | ||
|---|---|---|
| CURRENT LIABILITIES: | ||
| Accounts payable and accrued liabilities | $ 81,708 | $ 78,042 |
| Current frequent stay program liability | 117,949 | 96,193 |
| Current deferred revenue | 16,845 | 16,327 |
| Deposits | 10,109 | 12,460 |
| Line of credit | - | - |
| TOTAL CURRENT LIABILITIES | 226,611 | 203,022 |
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the Current Liabilities section of their balance sheet includes several components. As of November 30, 2024, these were: accounts payable and accrued liabilities, which totaled $81,708; current frequent stay program liability, amounting to $117,949; current deferred revenue, listed at $16,845; and deposits, which came to $10,109. The line of credit is listed as zero. The total current liabilities for Best Western as of November 30, 2024, were $226,611.
When evaluating a franchise, understanding the franchisor's liabilities is crucial. Current liabilities represent obligations due within one year, so these figures provide insight into Best Western's short-term financial obligations. For example, 'accounts payable and accrued liabilities' typically include amounts owed to suppliers and other short-term debts. The 'current frequent stay program liability' reflects the obligations Best Western has to its loyalty program members for points or rewards they have earned but not yet redeemed. 'Current deferred revenue' represents payments Best Western has received for services or products that have not yet been delivered or earned.
The balance sheet also shows figures from the previous year, November 30, 2023, allowing for a year-over-year comparison. For instance, accounts payable and accrued liabilities were $78,042, the current frequent stay program liability was $96,193, current deferred revenue was $16,327, and deposits were $12,460. The total current liabilities as of November 30, 2023, were $203,022. Reviewing these changes can help potential franchisees understand the trends in Best Western's financial obligations.
Prospective franchisees should analyze these figures carefully, possibly with the help of a financial advisor, to assess the financial health and stability of Best Western. Understanding the nature and magnitude of these liabilities can inform their decision-making process and help them evaluate the risks and opportunities associated with investing in a Best Western franchise.