Does Camp Margaritaville consider itself the principal or an agent with respect to sales taxes collected?
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)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the brand considers the franchisee (referred to as 'Customer' in this context) responsible for sales taxes related to the services provided. Specifically, the franchisee is responsible for configuring the platform to collect applicable sales taxes, communicating the amount of these taxes, and remitting them to the appropriate governmental authorities. Camp Margaritaville will reimburse the franchisee for the amount of taxes remitted. This arrangement suggests that Camp Margaritaville views the franchisee as the principal in collecting and managing sales taxes, while Camp Margaritaville acts as an agent by reimbursing the franchisee for these tax payments.
This arrangement places the onus of compliance with sales tax laws on the Camp Margaritaville franchisee. The franchisee must ensure that the platform used for transactions is correctly set up to collect the right amount of sales tax, keep accurate records of these collections, and make timely payments to the relevant tax authorities. Failure to comply with these obligations could result in penalties, interest, and other additions to the tax liability, for which the franchisee would be responsible.
Franchisees should be aware of their obligations regarding sales tax collection and remittance. They should consult with a tax professional to ensure they understand the applicable sales tax laws in their jurisdiction and that they are properly collecting and remitting sales taxes. Additionally, franchisees should maintain detailed records of all sales tax collections and payments to facilitate accurate reporting and compliance.