How are monthly fees and assessments billed and recognized as revenue for Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
Fees, dues and assessments are established by the membership and the Board of Directors to compensate the Company for providing services to Members, soft brand licensees, SureStay franchisees, and WorldHotels licensees. The Company has performance obligations to provide hotel support and marketing, and a license to our hotel system intellectual property for the use of our brand names. Our performance obligations are a series of distinct goods or services, for which the Company receives the following types of variable consideration through our membership agreements with our Members. 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, marketing, and technology expenses, are billed monthly. These fees represent both fixed and variable considerations. 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 when it has provided the services and can reliably determine the amount they are owed.
This approach to revenue recognition aligns with standard accounting practices, where revenue is typically recognized when it is earned and realized or realizable. For a Bw Premier Collection franchisee, this billing and revenue recognition process means that they will be invoiced monthly for these fees, and Bw Premier Collection will account for this income in the same period. This consistent monthly billing helps Bw Premier Collection maintain a steady revenue stream, which is crucial for covering ongoing operational costs and investments in brand support and marketing initiatives.
Furthermore, the FDD states that annual dues are established, billed, and payable each year for continuing membership during the succeeding year. These annual dues are recognized as revenue ratably over the year to which the continuing membership applies. This contrasts with the monthly fees, which are recognized immediately. If a member resigns or is terminated, all 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 contract term. This policy ensures that Bw Premier Collection can recover outstanding amounts in the event of early termination.
In summary, Bw Premier Collection's revenue recognition policy for monthly fees and assessments is straightforward: bill monthly, recognize revenue in the same month services are provided and charges are fixed. This approach provides transparency and predictability for both the franchisor and the franchisee, ensuring that financial reporting accurately reflects the ongoing business operations and obligations.