What were the adjustments to goodwill for Hotel Management under Hawthorn Suites By Wyndham?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
Beginning with the first quarter of 2023, as a result of the changes in its Hotel Management segment including the exit from the select-service management business, the sale of its two owned hotels and the exit from substantially all of its U.S. full-service management business, the Hotel Management segment no longer met the quantitative thresholds to be disclosed as a reportable segment. As a result, the Company has aggregated, on a prospective basis, the remaining hotel management business, which is predominately the full-service international managed business within its Hotel Franchising segment.
Due to the adoption of the 2023 Accounting Update*,* the Company changed its primary measure of segment profit or loss from adjusted EBITDA to net income.
Source: Item 23 — RECEIPTS (FDD pages 92–402)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Hawthorn Suites By Wyndham's parent company, Wyndham Hotels, has made changes to its segment reporting. Specifically, the Hotel Management segment no longer meets the quantitative thresholds to be disclosed as a reportable segment. This change occurred because of the exit from the select-service management business, the sale of two owned hotels, and the exit from substantially all of its U.S. full-service management business. As a result, the remaining hotel management business, primarily the full-service international managed business, has been aggregated within the Hotel Franchising segment.
Due to these changes, the primary measure of segment profit or loss has shifted from adjusted EBITDA to net income following the adoption of the 2023 Accounting Update. The chief operating decision maker (CODM) now evaluates the operating results on a consolidated basis using net revenues and net income, aligning with GAAP measurement principles. Adjusted EBITDA is still used to evaluate the Hotel Franchising segment.
This restructuring and change in financial reporting could impact how potential Hawthorn Suites By Wyndham franchisees assess the financial performance and resource allocation within the company. The aggregation of the remaining hotel management business into the Hotel Franchising segment means that the performance of these two areas will be reported together, potentially obscuring the individual performance of each. Prospective franchisees may want to inquire about the historical performance data of the Hotel Management segment and how the changes in segment reporting may affect future financial transparency.