Does the FDD specify any limitations on the amounts that can be debited from the Camp Margaritaville participant's account?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 7.03 Underpayments. In the event that an audit reveals an underpayment by Franchisee of fees owed to Franchisor, Franchisee shall, within 7 calendar days after Franchisor's notice of such underpayment: (a) reimburse Franchisor for the cost of the audit, if the underpayment is equal to or greater than 5% of the amount due; and (b) remit payment to Franchisor in the amount of the underpayment plus interest at the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect at its principal office in New York City in connection with extensions of credit in U.S. funds to its U.S. customers, plus 2% per annum, calculated from the date such payment(s) were actually due.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
The 2025 Camp Margaritaville FDD does not specify any limitations on the amounts that can be debited from a participant's account. The document does outline underpayment scenarios.
Specifically, if an audit reveals that a Camp Margaritaville franchisee has underpaid fees, the franchisee must reimburse Camp Margaritaville for the cost of the audit if the underpayment is equal to or greater than 5% of the amount due. Additionally, the franchisee must remit payment to Camp Margaritaville for the underpayment plus interest. The interest rate is calculated as the prime rate publicly announced by JPMorgan Chase Bank in New York City, plus 2% per annum, calculated from the date the payments were originally due.
This means that as a Camp Margaritaville franchisee, you are responsible for ensuring accurate and timely payments of all fees owed to the franchisor. Failure to do so can result in additional costs, including audit fees and interest charges, especially if the underpayment exceeds the 5% threshold. Franchisees should maintain meticulous records and accounting practices to avoid underpayment issues and potential financial penalties.