What constitutes a 'Change of Control' in the context of a Camp Margaritaville franchise?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
"Change of Control" shall mean any transaction or series of related transactions pursuant to which: (i) any Person, or any 2 or more Persons acting as a group, and all Affiliates of such Person or Persons, who prior to such transaction(s) owned shares representing less than 50% of the voting power at elections for the board of directors of the Franchisee, shall acquire, whether by purchase, exchange, tender offer, merger, consolidation or otherwise, shares of the Franchisee's capital stock or other means of controlling voting such that following any such transactions, or series of transactions, such Person or group and their respective Affiliates beneficially own 50% or more of the voting power at elections for the board or any successor; or (ii) Franchisee shall sell all or substantially all of its assets, or the majority of its assets if such sale includes the assets relating to Franchisee's performance of its obligations under this Agreement;
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, a 'Change of Control' is defined as a transaction, or a series of related transactions, that results in a significant shift in the ownership or control of the franchise. This includes scenarios where a person or group of people, along with their affiliates, who previously owned less than 50% of the voting power in the election of the board of directors, acquire shares or other means of control such that they then own 50% or more of the voting power.
Another scenario that constitutes a 'Change of Control' is when the Camp Margaritaville franchisee sells all or substantially all of its assets. If the sale includes the assets relating to the franchisee's performance of its obligations under the franchise agreement, then even the sale of a majority of the assets can be considered a 'Change of Control'.
For a prospective Camp Margaritaville franchisee, understanding what constitutes a 'Change of Control' is crucial because it triggers certain obligations to notify the franchisor and seek approval for the transfer. Failing to do so could result in a breach of the franchise agreement. This definition ensures that Camp Margaritaville maintains control over who operates its franchises and that the brand's standards are upheld, even if the ownership changes.