When does Best Western recognize revenue from the Best Western Travel Card®?

According to Best Western's 2025 Franchise Disclosure Document, revenue from the Best Western Travel Card®, which has no expiration date or usage fees, is recognized under specific conditions. Best Western recognizes revenue either when the Travel Card is redeemed by a customer or when the likelihood of the Travel Card being redeemed is considered remote, a situation referred to as "Best Western Travel Card breakage."

In the case of breakage, Best Western must also determine that there is no legal obligation to remit the unredeemed Travel Card balance to the relevant jurisdiction. This determination is based on the company's historical redemption patterns. The revenue recognized from Best Western Travel Card breakage is included in the program revenues reported in the Consolidated Statements of Revenues and Expenses.

This accounting practice means that Best Western accounts for revenue from unredeemed travel cards that are unlikely to be used, which can impact the company's financial statements. For a prospective franchisee, understanding these revenue recognition policies is important for assessing the financial health and stability of the Best Western brand.