Are adjustments to revenue in conformance with GAAP excluded from Gross Revenue for Camp Margaritaville?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Revenue shall exclude only: (a) free or discounted rooms and upgrades or other "comps" for which the Resort collects no revenue or in-kind value for; (b) federal, state, or municipal excise, room, sales, or use taxes, or similar taxes collected from guests and paid to an applicable governmental authority; (c) gratuities, service charges, or similar receipts collected and then paid directly to staff; (d) any sale of fixtures, machinery, or other equipment that is not in the ordinary course of your business; (e) any gift card, coupons, or the like at the time of purchase, but which shall be included in Gross Revenue upon redemption; (f) any complimentary breakfast service; and (g) any other adjustments to revenue in conformance with accounting principles generally accepted in the United States ("GAAP") and the Uniform System of Accounts for the Lodging Industry, 11th Edition (Educational Institute of the American Hotel and Motel Association, publisher), or a later edition we approve ("Uniform System") (excluding any adjustment that excludes resort fees and the like).
We and you will account for Gross Revenue according to the Uniform System.
Source: Item 6 — OTHER FEES (FDD pages 20–34)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, adjustments to revenue that conform with Generally Accepted Accounting Principles (GAAP) in the United States and the Uniform System of Accounts for the Lodging Industry are excluded from Gross Revenue calculations. However, this exclusion does not apply to any adjustment that excludes resort fees and the like. The FDD specifies that Camp Margaritaville and its franchisees will account for Gross Revenue according to the Uniform System.
This means that when calculating the revenue on which Camp Margaritaville franchisees pay royalties and other fees, they can exclude adjustments made in accordance with standard accounting practices. This can provide some relief to franchisees, as it ensures they are not paying royalties on revenue that has been adjusted for legitimate accounting reasons. However, it is important to note the exception for resort fees, which cannot be excluded from Gross Revenue, ensuring that Camp Margaritaville receives its share of these charges.
For a prospective Camp Margaritaville franchisee, understanding these exclusions is crucial for accurate financial planning and royalty calculations. Franchisees should familiarize themselves with both GAAP and the Uniform System of Accounts for the Lodging Industry to ensure proper accounting practices and reporting. Additionally, franchisees should pay close attention to what constitutes a resort fee to ensure accurate reporting of Gross Revenue and avoid potential disputes with the franchisor.