For Best Western as of November 30, 2024, which reporting units has goodwill been allocated to?

According to Best Western's 2025 Franchise Disclosure Document, goodwill is allocated to two specific reporting units as of November 30, 2024. These reporting units are WorldHotels and AutoClerk. This allocation indicates that Best Western recognizes these two entities as having significant intangible assets, such as brand reputation or customer relationships, that contribute to their overall value. Goodwill, in accounting terms, represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business acquisition.

For a prospective Best Western franchisee, understanding where goodwill is allocated can provide insights into the company's strategic investments and the perceived value of its various business segments. WorldHotels, as a licensor, and AutoClerk, providing property management systems, are considered key components of Best Western's operations. The allocation of goodwill to these units suggests that Best Western sees them as significant contributors to its financial performance and growth potential.

The FDD also mentions that Best Western has elected to amortize goodwill over a 10-year period. The amortization expense for goodwill was approximately $0.8 million for the years ended November 30, 2023 and 2022, and is estimated to remain around $0.8 million annually for the fiscal years ending 2024 through 2028. This consistent amortization expense provides a predictable financial aspect related to these intangible assets. Additionally, trademarks and trade names resulting from the WorldHotels acquisition were valued at $1.3 million as of November 30, 2023 and 2022, further emphasizing the financial importance of this reporting unit.

In summary, the allocation of goodwill to WorldHotels and AutoClerk highlights their strategic importance within the Best Western organization. The consistent amortization schedule and the valuation of trademarks associated with WorldHotels offer additional financial context for potential franchisees evaluating the stability and long-term planning of Best Western's financial management.