From what sources do the accounts receivable of Bw Premier Collection principally derive?
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's accounts receivable primarily come from its members. These receivables consist of amounts due from hoteliers who have membership, franchise, or license agreements with Bw Premier Collection. These amounts also include reimbursements for costs that Bw Premier Collection incurs on behalf of these hoteliers. These receivables are recorded at their amortized cost, representing the amounts owed to Bw Premier Collection by its customers.
Bw Premier Collection also accounts for potential credit losses by recording allowances for current expected credit losses. These allowances are determined by assessing the credit risk of customers and the collectability of accounts. This assessment involves considering the age of outstanding invoices and evaluating the expected risk of credit loss based on current conditions and forecasts of future economic conditions. The company pools its trade receivables based on similar risk characteristics to estimate expected credit losses, and individually measures receivables that do not share the same risk characteristics with others.
Bw Premier Collection extends credit to its hoteliers, tour operators, central bill accounts, and other third parties in the normal course of business. The collectability of accounts receivable balances is evaluated based on the type of relationship the company has with the account, prior experience with accounts in each relationship type, and an evaluation of current and projected economic conditions. Non-payment by a member, franchisee, or licensee can lead to cancellation of their Best Western membership, license, or franchise.