How does the amortization of debt issue costs for Camp Margaritaville compare between 2022 and 2023?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
- No life insurance proceeds were received in 2022. The Company made additional principal payments against the term loan of $787,500 in 2023 and $5,905,000 in 2022; and additional principal payments against the delayed draw of $180,000 in 2023.
The debt facility includes subordinated debt associated with related-party entities. The balance of the related-party note payable was $9,805,332 as of December 31, 2023 and 2022. The subordinated note is owned by s
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the amortization of debt issue costs decreased from 2022 to 2023. In 2022, Camp Margaritaville had debt issuance cost amortization of $449,152. However, in 2023, the debt issuance cost amortization was $0. This indicates a significant change in how Camp Margaritaville handled debt-related expenses between the two years.
This change could be due to several factors, such as paying off debt, refinancing, or changes in accounting practices. For a prospective franchisee, this information is relevant because it provides insight into Camp Margaritaville's financial management and debt strategy. Understanding how the company manages its debt can help franchisees assess the financial stability and potential risks associated with investing in the franchise.
It's important for potential franchisees to investigate the reasons behind this change. They should ask Camp Margaritaville for clarification on why the debt issuance cost amortization was $0 in 2023 compared to $449,152 in 2022. Understanding the reasons for this variance will give franchisees a clearer picture of the company's financial health and future prospects.