How does Best Western recognize affiliation fee revenues from Best Western branded hotels?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
l dues are recognized as revenue ratably in the year to which the continuing membership applies. Any Member may resign from the Company at any time, but if the Member resigns or is terminated, fees and
November 30, 2024
dues become immediately due and payable per the terms of the applicable contract and are recognized as revenue when cash is received regardless of the term of the contract.
Affiliation fee revenues from Best Western branded hotels are fixed consideration payable upon approval of the Member or licensee by the Board of Directors and acceptance of membership or license terms by the property owner. These revenues are recognized on a straight-line basis over the hotelier's expected life as a Best W
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, affiliation fee revenues from Best Western branded hotels are treated as fixed consideration. These fees are payable once the Board of Directors approves the Member or licensee and the property owner accepts the membership or license terms.
Best Western recognizes these affiliation fee revenues on a straight-line basis. This means the revenue is spread out evenly over the expected life of the hotel as a Best Western branded hotel or over the initial contract term, whichever is applicable. This accounting method ensures that the revenue is recognized consistently over the period the hotel benefits from the Best Western brand.
For the years ending November 30, 2024, and November 30, 2023, Best Western reported affiliation fee revenues of $8.8 million and $9.8 million, respectively. This indicates the total revenue recognized during those periods from these affiliation fees, spread out according to the straight-line method described.