Who benefits from the authorization to debit and credit funds related to Camp Margaritaville?

According to the 2025 FDD, Camp Margaritaville benefits from the authorization to debit funds in situations where an audit reveals an underpayment of fees by the franchisee. Specifically, if an audit shows that a franchisee has underpaid fees owed to Camp Margaritaville, the franchisee must reimburse Camp Margaritaville for the cost of the audit if the underpayment is equal to or greater than 5% of the amount due. Additionally, the franchisee must remit payment to Camp Margaritaville for the underpayment, along with interest calculated at a rate based on the JPMorgan Chase Bank's prime rate plus 2% per annum. This interest is calculated from the date the payment was originally due.

This arrangement ensures that Camp Margaritaville is compensated for any discrepancies in payments and that franchisees are held accountable for accurate and timely payments. The inclusion of interest on underpayments serves as an incentive for franchisees to ensure their payments are correct and on time. The threshold of 5% for audit reimbursement provides a reasonable limit, preventing Camp Margaritaville from charging franchisees for minor discrepancies.

In the franchise industry, it is common for franchisors to conduct audits and charge interest on underpayments to maintain financial integrity and ensure compliance with the franchise agreement. The specific terms, such as the interest rate and the threshold for audit reimbursement, can vary among different franchise systems. Prospective Camp Margaritaville franchisees should carefully review these terms to understand their financial obligations and the potential costs associated with underpayments.