What is Best Western's policy regarding lease agreements with terms of 12 months or less?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
- (A) Except as provided in Article II, Section 7(B) of these Bylaws, a Membership shall automatically terminate on the date of the occurrence of any one of the following events:
- (1) The Best Western Property is leased or subleased;
- (2) A lease of the Best Western Property terminates;
- (3) If the Best Western Property is not leased, a change occurs of 50% or more of the equitable ownership of the Best Western Property within a 12-month period;
- (4) A change occurs of 50% or more of the equitable ownership of a leasehold interest within a 12-month period;
- (5) If the Best Western Property is not leased, a change occurs of 50% or more of the equitable ownership of the entity or entities owning the Best Western Property within a 12-month period;
- (6) A change occurs of 50% or more of the equitable ownership of the entity or entities leasing the Best Western Property within a 12-month period.
- (7) A term or condition is not met, after the Board, having provided the Member with an opportunity for a hearing, has found grounds exist for cancellation of the Membership and the Member has been granted a conditional extension in lieu of cancellation.
- (8) A Member or Member with Conditions fails to maintain and provide proof of insurance coverage as required by the Rules and Regulations.
- (9) A term or condition is not met by a Member whose Membership Application was approved by the Board with specific requirements and time frames for compliance prior to final approval of the Membership and has been advised that failure to meet any of these requirements will be grounds for automatic cancellation.
Except for the events specified in Paragraphs (A)(7), (8) and (9) of this Article II, Section 7, a Member may request an opportunity to be heard by submitting to the Board, in writing, at least 30 days prior to the effective date of the occurrence, the reasons,
in specific detail, why the automatic termination provisions are inapplicable and the termination should not occur. The Board in its sole discretion may request the Member appear in person and provide oral testimony. The Board shall have sole discretion to determine whether an event of automatic termination will or has occurred.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, a Best Western membership will automatically terminate if the property is leased or subleased, or if the lease of the Best Western property terminates. Additionally, if the Best Western property is not leased, a change of 50% or more of the equitable ownership of the Best Western property within a 12-month period will also result in automatic termination of the membership. The same applies to a change of 50% or more of the equitable ownership of a leasehold interest within a 12-month period. These conditions are outlined in Article II, Section 7(A) of Best Western's Bylaws.
These stipulations are significant for prospective franchisees because they highlight the importance of maintaining stable property ownership or lease arrangements. Any lease or sublease of the property, termination of a lease, or significant change in ownership (50% or more within 12 months) can trigger an automatic termination of the Best Western membership. This could lead to a loss of the franchise and associated brand benefits.
However, the document also provides a mechanism for members to appeal these automatic terminations. Except for specific events related to unmet terms or conditions, a member can submit a written request to the Board at least 30 days before the effective date of the occurrence, explaining why the termination provisions should not apply. The Board has the sole discretion to determine whether an event of automatic termination will occur. This appeal process offers a potential safeguard for members facing unforeseen circumstances that might otherwise lead to termination.
It is important for potential Best Western franchisees to carefully review and understand these conditions, as they directly impact the stability and continuation of their membership. Prospective franchisees should seek clarification from Best Western regarding specific scenarios and the appeal process to ensure they are fully aware of their rights and obligations.