What factors might have contributed to the gain on insurance settlement for Camp Margaritaville in 2023?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
erates an Other Resort at the location of the Resort, and such Other Resort has not been offered to Franchisor to be operated pursuant to a license or franchise from Franchisor or any of its Affiliates, or managed by Franchisor, then Franchisee shall be deemed to have wrongfully terminated this Agreement and Franchisee shall, upon Franchisor's demand, pay Franchisor the liquidated damages in the amount of $4,000 multiplied by the number of Overnight Accommodations in the Resort.
Section 15.03 Reconstruction After Casualty. If this Agreement is not terminated pursuant to Section 15.02, then Franchisee must commence reconstruction of the Resort within 90 days after the occurrence of the casualty and must diligently complete the reconstruction within 2 years after the occurrence of the casualty. The Resort must be reconstructed to at least the condition and character of the Resort immediately before the casualty occurred and Franchisee may not reopen the Resort or promote or otherwise hold the Resort out using the Camp Margaritaville Intellectual Property unless and until Franchisor determines that the reconstruction is completed in accordance with Franchisor's then-current standards. If, at the mutual agreement of the Parties, the Resort (or portions thereof) are not required to be closed, all work to repair damage shall be conducted so as to minimize interference with the Resort's operation and guests. If Franchisee fails to perform its obligations under this Section 15.03, then Franchisor has the right to terminate the Agreement effective upon written notice to Franchisee.
Section 15.04 Temporary Closure. If, after the Opening Date, the Resort suffers damage or loss that results in an interruption in the operation of the Resort, then Franchisee is nevertheless obligated to pay all expenses of operating and maintaining the Resort at a level that is reasonably determined by Franchisor to be practical given the damage or loss that has occurred. Franchisee shall ensure that the Royalties, Marketing Fee, and any other sums payable to Franchisor under this Agreement are insured within Franchisee's business interruption insurance policy. Such policy shall insure against "all risks" of physical loss or damage and be endorsed to provide for payments to be made directly to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Camp Margaritaville franchisees are required to maintain business interruption insurance that covers all risks of physical loss or damage. This policy must also be endorsed to allow payments to be made directly to the franchisor. If a casualty event leads to reduced gross revenue, the franchisee is obligated to pay Camp Margaritaville an amount equal to the forecasted monthly payments that would have been due in the absence of the casualty. This payment is to be made from the proceeds of any business interruption or other insurance applicable to the loss of revenues.
Additionally, the FDD stipulates that if a Camp Margaritaville Resort suffers damage, the franchisee must begin reconstruction within 90 days of the event and complete it within two years. The resort must be restored to its pre-casualty condition, and the franchisee cannot reopen or use Camp Margaritaville's intellectual property until the franchisor confirms the reconstruction meets their standards.
While the provided excerpts outline insurance requirements and reconstruction obligations, they do not provide specific details on what might have caused a gain on an insurance settlement for Camp Margaritaville in 2023. To understand the factors contributing to such a gain, a prospective franchisee should ask the franchisor for details on any specific events that triggered insurance settlements, the terms of those settlements, and how they impacted the franchisee's financial obligations.