What was the fair value of the vested shares for Camp Margaritaville as of December 31, 2023?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
ppreciation in the Company that accrue above a Hurdle Amount upon a Company Transaction. A Company Transaction is defined in the MEIPs as the sale of the Company, a liquidity event, a qualified initial public offering, or the dissolution of the Company. In 2023, the Company made the decision to withdraw a portion of the proceeds from the delayed draw term loans and distribute to holders of Class A, B, and C shares. In 2024, the Company withdrew the remaining funds from the delayed draw term loans to distribute to holders of Class A, B, and C shares. The Company paid distributions to Class B and C holders as follows:
| Delayed Draw | Class B | |-------------------|------------------------------| | | Class C | | 2024 Delayed Draw | $ 1,170,953 $ 1,280,932 | | 2023 Delayed Draw | 1,080,880 1,225,157 | In 2023, the Hurdle Amounts for all holders of Class B and C shares who did not partake in the distribution were lowered. The change in hurdle rates was the catalyst for modification accounting, resulting in a revaluation of the shares and incremental compensation costs incurred. Incremental compensation cost resulting from the modification wa
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the fair value of vested shares as of December 31, 2023, was $7,962,207. This figure represents the total valuation of shares that had met their vesting requirements by that date.
For a prospective Camp Margaritaville franchisee, understanding the share structure and valuation can be important, although it may not directly impact their day-to-day operations. The vested shares typically relate to the ownership and equity structure of the parent company, Margaritaville Holdings LLC, rather than the individual franchise units.
The FDD provides a snapshot of the company's equity situation, which can be useful for assessing the overall financial health and stability of Camp Margaritaville. Reviewing these figures in the context of the company's overall financial statements, along with professional financial advice, can offer insights into the long-term prospects of the franchise system.