How are annual dues recognized as revenue for Surestay Hotel By Best Western?
Surestay_Hotel_By_Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
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 88–286)
What This Means (2025 FDD)
According to the 2025 FDD, Surestay Hotel By Best Western outlines its revenue recognition policies for fees, dues, and assessments. These are established by the membership and the Board of Directors to compensate the company for services provided to members, soft brand licensees, SureStay franchisees, and WorldHotels licensees. These services include hotel support and marketing, as well as licensing the use of their brand names.
For annual dues specifically, Surestay Hotel By Best Western states that these dues are established, billed, and payable each year for continuing membership in the subsequent year. The revenue from these annual dues is recognized ratably over the year to which the continuing membership applies. This means that instead of recognizing the entire amount of the annual dues when they are received, Surestay Hotel By Best Western spreads the recognition of the revenue evenly throughout the year that the membership covers.
However, there is an exception to this ratable recognition. If a member resigns or is terminated, all fees and dues become immediately due and payable per the terms of the applicable contract. In such cases, Surestay Hotel By Best Western recognizes the revenue when cash is received, regardless of the original term of the contract. This ensures that all outstanding dues are accounted for immediately upon a member's departure or termination.