How does Bw Premier Collection limit credit risk related to accounts receivable from hoteliers?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
Accounts receivable, principally from Members, net, are primarily from Member, franchisee, licensee fees and services, and product sales. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of hoteliers located throughout the world comprising the Company's customer base. The Company does not require collateral within credit limits established. In those instances when a Member, franchisee, or licensee requests product in excess of the credit limit allowed by Company policy, the Company requests a letter of credit, deposit, or prepayment to secure the collection of accounts receivable. The Company performs ongoing evaluations of its hotelier receivables; non-payment can lead to cancellation of the applicable membership, license or franchise.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the company limits credit risk related to accounts receivable from its hoteliers through several methods. The concentrations of credit risk are limited due to the large number of hoteliers comprising Bw Premier Collection's customer base throughout the world. Bw Premier Collection does not require collateral within established credit limits.
However, when a member, franchisee, or licensee requests product in excess of their credit limit allowed by company policy, Bw Premier Collection may request a letter of credit, deposit, or prepayment to secure the collection of accounts receivable. This ensures that Bw Premier Collection has some form of security for the amount exceeding the established credit limit, reducing the risk of non-payment.
Additionally, Bw Premier Collection performs ongoing evaluations of its hotelier receivables. This allows the company to monitor the payment behavior of its members and identify potential risks early on. If a hotelier fails to make payments, it can lead to cancellation of their Best Western membership, license, or franchise, which serves as an incentive for timely payments and a risk mitigation measure for Bw Premier Collection.