When preparing Best Western's financial statements, what evaluation is management required to make regarding the company's ability to continue as a going concern?

According to Best Western's 2025 Franchise Disclosure Document, when preparing the company's financial statements, management must evaluate whether conditions or events, when considered in the aggregate, raise substantial doubt about Best Western's ability to continue as a going concern for one year after the date that the financial statements are available to be issued. This evaluation is a standard accounting practice, ensuring that the financial statements provide a realistic view of the company's financial health.

This "going concern" assessment is crucial for prospective franchisees because it speaks directly to the stability and long-term viability of Best Western. If there are significant doubts about the company's ability to continue operating, it could impact the support and services that Best Western provides to its franchisees. It also could affect the overall brand reputation and the value of a Best Western franchise.

Franchisees should review the auditor's report and the financial statements carefully, paying close attention to any notes or disclosures related to the going concern assessment. Any qualified opinions or disclosures indicating potential issues could warrant further investigation and discussion with Best Western's management team. Understanding this assessment provides franchisees with a clearer picture of the financial risks and opportunities associated with investing in a Best Western franchise.