How does Camp Margaritaville account for interest and penalties associated with uncertain tax positions?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Customer shall be responsible for and shall reimburse and indemnify Margaritaville for all sales, use, value added, goods and services and other similar taxes (including, without limitation, penalties, interest, additions to tax and similar amounts), whether federal, state, local, foreign or
otherwise, which are related to the Services, other than taxes imposed on the net income of Margaritaville (collectively, "Taxes"). Customer shall: (i) ensure that the Platform is configured to collect the applicable sales taxes at all times; (ii) communicate the amount of the Taxes to Margaritaville (for which Margaritaville will reimburse Customer); and (iii) remit the Taxes to the applicable governmental authorities. All payments due to Margaritaville under these Terms of Use shall be made free and clear of any Taxes. If Customer is required by law to make any deduction or withholding of Taxes from any payment due to Margaritaville under these Terms of Use, Customer shall (i) timely and properly prepare and submit any necessary filings and remit such Taxes to the appropriate taxing authority, and (ii) provide Margaritaville with governmental receipts evidencing Customer's withholding and payment to the appropriate tax authorities in a timely manner.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
Based on the 2025 Camp Margaritaville Franchise Disclosure Document, franchisees are responsible for taxes related to the services they provide, including any associated penalties and interest. Specifically, the franchisee must reimburse and indemnify Margaritaville for all sales, use, value-added, goods and services, and other similar taxes. This includes any penalties, interest, or additional amounts levied, whether by federal, state, local, or foreign authorities. The only exception is taxes imposed on Margaritaville's net income.
The franchisee is responsible for ensuring that the platform used for sales is configured to collect applicable sales taxes at all times. They must also communicate the amount of these taxes to Margaritaville, who will then reimburse the franchisee. Ultimately, the franchisee is responsible for remitting these taxes to the appropriate governmental authorities. All payments made to Margaritaville must be free and clear of any taxes.
If the franchisee is legally required to deduct or withhold taxes from any payment due to Margaritaville, they must properly prepare and submit the necessary filings and remit the taxes to the appropriate taxing authority. Furthermore, the franchisee must provide Margaritaville with governmental receipts as proof of withholding and payment to the tax authorities in a timely manner. This ensures that Camp Margaritaville is protected from any tax-related liabilities arising from the franchisee's operations and that the franchisee remains compliant with all applicable tax laws.