What is meant by 'incremental impact' in the context of a Best Western Impact Analysis?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
The Impact Analysis will analyze the applicant's prospect for success, the demand for the applicant's services in the relevant market and the incremental impact on existing Members within the relevant market, and provide such other information as we may request it include. For this purpose, incremental impact means the occupancy and revenue losses (expressed as a percentage) projected to result from the operation of the applicant's proposed System Hotel, less any occupancy and revenue losses projected to result to existing System Hotels in the relevant market from operation of the property covered by the application as a non- System Hotel.
Source: Item 12 — Territory (FDD pages 77–84)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, an 'incremental impact' is specifically defined within the context of an Impact Analysis. This analysis assesses the effect of a new Best Western hotel applicant on the existing Best Western hotels in the relevant market.
Specifically, the 'incremental impact' refers to the projected occupancy and revenue losses, expressed as a percentage, that existing Best Western hotels are expected to experience due to the operation of the new applicant's proposed hotel. This projection takes into account a crucial adjustment: it subtracts any occupancy and revenue losses that existing Best Western hotels would likely face if the applicant's property were to operate as a non-Best Western hotel. In other words, it isolates the impact directly attributable to the new hotel joining the Best Western system.
This definition is important for prospective Best Western franchisees because it clarifies how the potential negative effects of a new nearby Best Western hotel will be evaluated. The Impact Analysis aims to determine whether the new hotel will significantly harm the existing franchisees' ability to compete, particularly against non-Best Western properties. The Best Western Board uses this information to decide whether to approve the new application, balancing growth with the protection of its current members. Understanding this definition helps a franchisee assess the true risk and potential competitive pressures from new Best Western locations.