What costs are included in the cost of restaurant and retail merchandise sales for Camp Margaritaville?

According to Camp Margaritaville's 2025 Franchise Disclosure Document, the costs of restaurant and retail merchandise sales consist of food, beverage, and retail merchandise sales. This definition is important for franchisees as it directly impacts the calculation of their expenses and profitability. Understanding which specific items are included in these costs allows for accurate financial planning and management.

For a Camp Margaritaville franchisee, this means that when calculating the cost of restaurant and retail merchandise sales, they should include the direct costs of purchasing food, beverages, and retail merchandise. These costs are a key component in determining the gross profit from these sales, which in turn affects the royalties and other fees payable to the franchisor. Accurate tracking and categorization of these costs are essential for maintaining financial transparency and compliance with the franchise agreement.

Furthermore, the FDD also mentions that licensing fees are received from entities that have contracted with the company for the limited right to use Margaritaville brand names. These fees are calculated based on net sales; gross profit; earnings before interest, taxes, depreciation, and amortization; or a fixed annual amount, as defined in each respective agreement. This indicates that the revenue side of restaurant and retail operations is also carefully defined and subject to specific accounting policies, which franchisees must adhere to.