What is a condition for Camp Margaritaville franchise renewal regarding compliance with agreements with third parties related to the Resort?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 1.03 Renewal Term and Conditions. The Franchisee may, but is not obligated to, renew this Agreement for 1 additional period of 10 years (the "Renewal Term"; and together with the Initial Term, the "Term"), provided that Franchisee has satisfied each of the following conditions (all of which shall be referred to as the "Renewal Conditions");
(a) Franchisee provides Franchisor written notice of its election to renew the Franchise Agreement for the Renewal Term between 12 and 18 months prior to the expiration of this Agreement (the "Renewal Notice");
(b) Prior to giving the Renewal Notice and for the remainder of the Initial Term:
- (i) Franchisee has fully performed all of its obligations under this Agreement;
(ii) Franchisee has satisfied all monetary obligations in a timely and responsible manner to Franchisor, its affiliates, subsidiaries, and designees;
(iii) Franchisee, its Affiliates, or Guarantors are not in default of this Agreement or any other agreement with Franchisor or its Affiliates and the Resort is in full compliance with the Camp Margaritaville System, the System Standards, and Manual;
(iv) Franchisee is not in default of any material obligations or materially delinquent on any undisputed payments due under any agreement with any third party related to the Resort, including without limitation, vendors, suppliers, lessors, or mortgage holders; and
(v) Franchisee provides certification of compliance with all conditions precedent to Franchisor with Renewal Notice.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, a franchisee's ability to renew their franchise agreement for an additional 10-year term depends on several conditions. One critical condition is that the franchisee must not be in default of any material obligations or materially delinquent on any undisputed payments due under any agreement with any third party related to the Resort. This includes, but is not limited to, agreements with vendors, suppliers, lessors, or mortgage holders.
This requirement means that a Camp Margaritaville franchisee must maintain good standing with all third parties involved in the operation of the Resort. Any failure to meet obligations or any delinquency in payments could jeopardize the franchisee's chances of securing a renewal term. This condition underscores the importance of sound financial management and adherence to contractual obligations throughout the initial 20-year term.
To ensure compliance, prospective Camp Margaritaville franchisees should carefully review all agreements with third parties, maintain meticulous records of payments, and proactively address any potential disputes or payment issues. Providing certification of compliance with all conditions precedent, including this one, is required with the Renewal Notice, which must be submitted between 12 and 18 months prior to the expiration of the initial agreement.