What is the estimated equity volatility for both MEIP I and MEIP II investments associated with Camp Margaritaville?

According to Camp Margaritaville's 2025 Franchise Disclosure Document, the estimated equity volatility for both MEIP (Management Equity Incentive Plan) I and MEIP II is 35.65%. This figure is used in the Black-Scholes simulation model to value the management units, which are profit interests granted to eligible participants. The model also incorporates assumptions such as the expected time to liquidity, risk-free rates, and expected dividends. For both MEIP I and MEIP II, the expected time to liquidity is estimated to be 4 years, and the dividend rate is 0.00%.

The MEIPs are designed to provide employees of Camp Margaritaville and its subsidiaries with the opportunity to receive grants of profit interests, compensating them for their contributions. The participants can benefit from the fair value gain over the initial investment once specific company benchmarks are achieved. The equity volatility is a key input in determining the fair value of these management units.

The volatility figure reflects the degree of variation in the trading price series over a specified time. A higher volatility suggests that the price of the asset can change dramatically over a short time period in either direction. For prospective franchisees, understanding these figures is crucial as they provide insight into how Camp Margaritaville values its management equity incentive plans and how these plans could potentially benefit employees involved in the franchise operations. The risk-free rate for MEIP I is 4.05% and for MEIP II it is 4.50%.