How are the monthly fees and assessments for Bw Premier Collection billed and recognized as revenue?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
Monthly fees and assessments (which include advertising, sales and marketing and reimbursement for the Company's technology expenses) represent fixed and variable consideration and are billed monthly and recognized as revenue in the same month as the services are provided and charges become fixed or determinable and payable. Annual dues are established, billed and payable each year for continuing membership during the succeeding year. Annual 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 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.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, monthly fees and assessments, which cover advertising, sales and marketing, and technology expenses, are billed monthly. These fees represent both fixed and variable consideration. Bw Premier Collection recognizes this revenue in the same month the services are provided and when the charges become fixed, determinable, and payable. This means that Bw Premier Collection recognizes the revenue in the period that it provides the associated services to its members.
In contrast, annual dues are established, billed, and payable each year for continuing membership. Bw Premier Collection recognizes these annual dues as revenue ratably over the year to which the continuing membership applies. This approach spreads the revenue recognition evenly throughout the year, aligning it with the ongoing membership benefits provided.
If a member resigns or is terminated, all outstanding fees and dues become immediately due and payable, as per the terms of the applicable contract. In such cases, Bw Premier Collection recognizes the revenue when cash is received, regardless of the original term of the contract. This immediate recognition ensures that Bw Premier Collection accounts for all outstanding obligations upon a member's departure.