What constitutes an Event of Default related to payments under the Camp Margaritaville Franchise Agreement?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 13.02 Events of Default with Opportunity to Cure. Franchisor may, but has no duty to, exercise any of the remedies in Article XIV, including, but not limited to, terminating this Agreement, if any of the following occur, all of which shall constitute an Event of Default by Franchisee under this Agreement, upon 30 days (or the earliest date permitted by law) written notice to Franchisee and Franchisee's failure to cure such default:
- (a) Franchisee breaches or fails to perform or observe any material covenant, duty or obligation contained in this Agreement in any material respect; provided, however, that if Franchisee has commenced to diligently and expeditiously cure such failure within the 30 day period following notice of the breach or failure as determined in the sole discretion of the Franchisor, such initial 30 day period shall be extended for a period of time as is commercially reasonable under the circumstances (not to exceed 90 days from the notice of breach) as long as Franchisee continues to diligently and expeditiously pursue a cure;
- (b) Franchisee fails to make any payment to Franchisor or any undisputed material amount to a vendor or supplier related to the Resort when due and owed or has insufficient funds in an account to satisfy such payment if made;
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, an Event of Default related to payments occurs if the franchisee fails to make any payment to Camp Margaritaville when due. This also applies to any undisputed material amount owed to a vendor or supplier related to the Resort. Furthermore, having insufficient funds in an account to cover such payments also constitutes an event of default.
Camp Margaritaville may choose to exercise remedies outlined in Article XIV, including terminating the agreement, if any of these payment-related defaults occur. However, Camp Margaritaville must provide the franchisee with 30 days written notice to cure the default. If the franchisee begins diligently curing the failure within this 30-day period, Camp Margaritaville may extend the cure period for a commercially reasonable time, not exceeding 90 days from the initial notice, as long as the franchisee continues to pursue a cure diligently.
It is important to note that any act or omission by any Owner, General Manager, or Management Company is deemed an act or omission by the franchisee when determining if a default has occurred. This means the franchisee is responsible for ensuring all parties adhere to the payment terms. Prospective franchisees should carefully review Article XIV in the FDD to understand the full scope of remedies available to Camp Margaritaville in the event of a default.