For Best Western members approved on or after January 1, 2018, how are the Monthly Fees determined?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
shall pay to the Corporation a pro-rata amount of any Development Incentive received based upon the number of months remaining in the Extended-Length Term.
Section 6. Fees and Dues
- (A) The Board shall establish Entrance Fees to be paid by Applicants. Such Entrance Fees may be changed by the Board from time to time, but cannot be waived. The exception to this limitation is the offering and acceptance of a Development Incentive.
- (B) The Board shall establish Annual Dues to be paid by Members eligible for continuing Memberships. Annual Dues shall be established by the Board during each fiscal year for the succeeding fiscal year.
- (C) The Board shall establish Monthly Fees designed to cover the cost of providing services to Members. Monthly Fees for Members approved by the Board on or after January 1, 2018, shall be as determined by the Board annually, prior to the following fiscal year; however, if a Member has or Members collectively have a minimum of a fifty percent (50%) financial ownership interest in the Applicant Best Western Property at the time of the Board's application approval, the Monthly Fees shall be three and one-half percent (3 ½%) of Property Room Revenue. For the purpose of an Applicant being eligible for a Monthly Fee of three and one-half percent (3 ½%) of Property Room Revenue, the Members or Members must have each and all been a Member as of July 1, 2016.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the determination of monthly fees depends on the approval date and ownership structure. For members approved on or after January 1, 2018, the monthly fees are determined annually by Best Western's Board. This means the Board sets the fees each year for the upcoming fiscal year, allowing for adjustments based on the cost of providing services to members.
However, there is an exception to this rule. If a member or a group of members collectively holds at least 50% financial ownership in the Best Western property at the time of application approval, the monthly fees are set at 3.5% of the Property Room Revenue. This provides a fixed percentage for monthly fees based on revenue, offering a potentially more predictable cost structure for owners with significant financial stakes in the property.
To qualify for the 3.5% of Property Room Revenue monthly fee, the members must have been members as of July 1, 2016. This stipulation ensures that only long-standing members with substantial ownership receive this preferential rate. This dual system allows Best Western to cater to different ownership structures while maintaining a consistent approach to fee determination.
It's important to note that the Board can increase annual dues, monthly fees, and assessments no more than once per fiscal year. These increases are capped at the lesser of 5% or the rate of inflation as measured by the United States Bureau of Labor Statistics Consumer Price Index, unless a majority of all members vote to approve a greater increase. This limitation does not apply to members paying monthly fees as a percentage of Property Room Revenue, providing the Board flexibility in adjusting fees for other members.