Accounts Receivable |
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| Accounts Receivable |
Trade Accounts Receivables
The following table sets forth the activity in the Company’s allowance for doubtful accounts on trade accounts receivable for the three months ended:
Loan Receivables
The Company occasionally provides financing to franchisees or their affiliates to support hotel development efforts and related initiatives, typically in the form of loan receivables. These loans vary by region and have differing maturities, ranging from under twelve months to over three years. The loans bear interest and are expected to be repaid in accordance with the terms, though in some cases they may be converted into development advance notes usually tied to hotel openings or the completion of required property improvements. In most instances, the Company obtains guarantees from the borrower or an affiliate and/or secures collateral to mitigate credit risk. Since the loan receivables do not share similar risk characteristics, the Company evaluates expected credit losses on an individual basis rather than a collective (pool) basis. At loan inception, the Company evaluates the collectability of each loan, which includes reviewing collection history on any amounts which had been due from these franchisees, and records expected credit losses as required. Additionally, the Company evaluates the collectability of these loans each reporting period to determine if a change to the allowance for loan loss is needed. Loans deemed uncollectible are written-off against the allowance for doubtful accounts. The Company also considers whether the historical economic conditions are comparable to current economic conditions. If current or expected future conditions differ from the conditions in effect when the historical experience was generated, the Company would adjust the allowance for doubtful accounts to reflect the expected effects of the current environment on the collectability of the Company’s loan receivables.
The Company’s Condensed Consolidated Balance Sheets include the following with respect to loan receivables:
______________________ (a) Loan receivables had a weighted average interest rate of 6.9% and 5.0% and a weighted average remaining contractual term of 2.0 years and 0.5 years as of March 31, 2025 and December 31, 2024, respectively.
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