From whom does Bw Premier Collection principally receive accounts receivable that are subject to credit risk?
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 Best Western 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's accounts receivable that are subject to credit risk primarily come from its Members. These accounts receivable consist mainly of fees and services from members, franchisees, and licensees, as well as product sales.
Bw Premier Collection mitigates these credit risks due to its large and diverse customer base of hoteliers located worldwide. The company typically does not require collateral within established credit limits. However, if a member, franchisee, or licensee requests products exceeding their credit limit, Bw Premier Collection may ask for a letter of credit, deposit, or prepayment to secure the accounts receivable.
Bw Premier Collection continuously assesses the creditworthiness of its hoteliers. If a hotelier fails to make payments, Bw Premier Collection can cancel the applicable Best Western membership, license, or franchise agreement. This ongoing evaluation and the ability to cancel agreements help Bw Premier Collection manage and limit its credit risk associated with accounts receivable.