Risk Score
Pending analysis
Investment Range
$441,490 - $6,888,025
Franchise Fee
$32,250
Min Cash Required
$357,000
Total US Locations
65
Business Summary
Best Western International, Inc. offers the right for existing hotels to convert and operate under either the "BW Premier Collection®" or "BW Signature Collection®" names. These hotels are then included in Best Western International, Inc.'s global reservations system. Premier Hotels are upscale and luxury properties, while Signature Hotels are upper-midscale, with both aiming to provide unique guest experiences.
Corporate History
Best Western International, Inc. was formed as an Arizona nonprofit corporation on December 13, 1957. Although members have operated hotels under the Membership Brands since around 1946, Best Western International, Inc. itself began offering licenses for its BW Premier Collection and BW Signature Collection hotels in April 2020. Hotel Owners have operated Premier Hotels since 2015 and Signature Hotels since 2017. The company has also expanded through subsidiaries, including SureStay, Inc., which offers hotel franchises, and AutoClerk, Inc., a property management system provider acquired in 2019.
Financial Overview
Investment Range
$441,490 - $6,888,025
Franchise Fee (Low)
$32,250
Franchise Fee (High)
$46,000
Minimum Cash Required
$357,000
Royalty %
5%
Marketing %
5%
Equipment Costs (Low)
$315
Equipment Costs (High)
$6,106,625
Working Capital
$372,225
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Best Western International, Inc. appears to be in a healthy financial position, reporting an unqualified audit opinion and a significant excess of revenues over expenses in recent years. As of November 30, 2024, the company has substantial total assets of $816 million and net assets of nearly $300 million. It also holds over $162 million in cash and cash equivalents. The auditors did not identify any conditions that raise substantial doubt about Best Western International, Inc.'s ability to continue as a going concern.
Financing Details
Best Western International, Inc. does not offer any direct or indirect financing options to its franchisees. Additionally, neither Best Western International, Inc. nor its affiliates will guarantee any notes, leases, or other obligations incurred by the franchisee.
Performance Metrics
Total US Locations
65
Franchised Units
65
Corporate Units
0
Franchising Since
2020
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
20
Litigation Summary
Best Western International, Inc. has a history of litigation, with 20 cases disclosed in Item 3. These include both concluded and recently initiated actions. Many concluded cases involved Best Western International, Inc. suing former members (franchisees) for unpaid fees or trademark infringement after their memberships were terminated. In several of these, the former members filed counterclaims alleging wrongful termination, breach of contract, fraud, or negligent misrepresentation. Best Western International, Inc. generally denied wrongdoing and settled many of these cases, often with the former members making installment payments. Some cases, like Best Western International, Inc. v. 764 4th Avenue Associates, LLC (a BW Signature Collection hotel), involved the hotel operating as a homeless shelter and underreporting occupancy, leading to Best Western International, Inc. suing for unpaid fees. There are also older administrative actions with state regulators (North Dakota, California, Maryland, Washington, Virginia) where Best Western International, Inc. was found to have violated franchise registration and disclosure laws by entering into membership agreements without proper registration or disclosures. These resulted in consent orders, payments of fees, and civil monetary penalties for Best Western International, Inc. As of the FDD issuance date, Best Western International, Inc. had initiated three new actions in its last fiscal year (2023-2024) to collect unpaid fees and for trademark infringement, which are ongoing.
Bankruptcy History
Best Western International, Inc. has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
The distribution agreement for Best Western International, Inc. hotels automatically renews for successive 10-year terms unless either the franchisee or Best Western International, Inc. provides written notice of its intent not to renew at least six months before the end of the current term. Franchisees are not required to sign a new distribution agreement upon renewal.
Training & Support Program
Franchisor Assistance
Before a Best Western International, Inc. hotel begins operation, the franchisor provides a reservation service and offers access to a list of suppliers. Franchisees can also use the optional Studio Design Services for design and aesthetics assistance. During operation, Best Western International, Inc. makes commercially reasonable efforts to market the hotel on its reservation service, display relevant hotel information, and provide sales and revenue management services. Franchisees can participate in the Best Western Rewards and gift card programs. The franchisor assesses the hotel at least once every 12 months to ensure quality and condition, maintains information security procedures, and provides digital marketing consultant services at no additional cost. Additionally, franchisees receive access to Best Western International, Inc.'s online education and training resources, including a learning management system, and can access guest satisfaction surveys for a monthly fee.
Ongoing Support
After opening, Best Western International, Inc. provides ongoing support through several channels. It continues to furnish access to its reservation service and uses commercially reasonable efforts to market the hotel and provide sales and revenue management services. Franchisees can participate in the Best Western Rewards and gift card programs. Best Western International, Inc. conducts annual quality assurance assessments and maintains information security procedures. Digital marketing consultant services are provided at no additional cost, covering primary contact for digital marketing channels, content optimization, social media, and Best Western Rewards support. Franchisees also have access to Best Western International, Inc.'s online education and training resources through its learning management system, and can access guest satisfaction surveys for a monthly usage fee. Best Western International, Inc. does not require or provide any ongoing or refresher training.
Franchise Requirements
Ideal Candidate Profile
Best Western International, Inc. seeks applicants who are already operating an existing hotel and wish to convert it to a BW Premier Collection or BW Signature Collection property. Key factors for approval include the applicant's operational experience, their ability to fund the conversion and ongoing operations, and the potential impact on existing hotels in the market. The specific location, current brand, number of guest rooms, demand generators, projected market growth, market competition, and extent of required renovations are also considered.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
supervisory
Territory Type
Non-Exclusive
Territory Size Requirements
Best Western International, Inc. does not grant franchisees any minimum or exclusive territory. Franchisees are granted the right to convert an existing hotel at a specified location to a BW Premier Collection or BW Signature Collection hotel. Best Western International, Inc. is not restricted from soliciting or accepting reservations from hotel guests located anywhere. Other Best Western International, Inc. brands and affiliates may also operate hotels in the same areas.
Staffing Notes
Best Western International, Inc. requires its franchisees to always retain and exercise management control over their hotel business. Franchisees can fulfill this responsibility by either utilizing a qualified and experienced management company or by employing a full-time, dedicated, on-premises general manager. Franchisees are also required to ensure that all their personnel maintain a courteous and professional attitude toward Best Western International, Inc. officers, directors, employees, and staff.