What happens if a Camp Margaritaville franchisee or licensee is not compliant with the terms of the franchise/license agreement regarding development funding?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 14.01 Franchisor's Remedies. Upon Franchisee's failure to timely cure any Event of Default as described in Section 13.02, upon an Event of Default under Section 13.03, or upon Franchisee's failure to cure any event of noncompliance under this Agreement or the System Standards (whether or not such failure constitutes an Event of Default), within 30 days of being notified of such failure in writing by Franchisor, Franchisor may, in its sole discretion, exercise any of the following remedies:
(a) Termination of this Agreement;
(b) Suspend access to the CRS provided that Franchisee shall remain responsible for all costs of participation;
(c) Suspend access to any advertising or marketing materials or assistance provided for franchisees in the Camp Margaritaville System;
(d) Remove Franchisee from the Resort System Website and any other advertising materials used for the Camp Margaritaville System;
(e) Suspend or terminate any fee reductions which Franchisor might have agreed to during the Term of this Agreement or any amendment to this Agreement;
(f) Require Franchisee to undergo additional Quality Assurance Audits as provided for in Section 4.16(b);
(g) Require Franchisee to have audited financial statements prepared annually during the Term;
(h) Require Franchisee, Key Personnel, or other employees of the Franchisee to participate in additional training;
(i) Refuse to provide any operational support that this Agreement otherwise requires Franchisor to provide, including other information technology and network services; or
(j) Assess Franchisee a fine up to $500 per day for each day the default or failure remains uncured thirty days after written notice.
Unless Franchisor expressly terminates this Agreement by issuing a written notice of the same, Franchisor's exercise of any of the foregoing remedies will not constitute an actual or constructive termination of this Agreement nor will such exercise be Franchisor's sole and exclusive
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
The 2025 Camp Margaritaville FDD outlines several potential actions that Camp Margaritaville can take if a franchisee fails to comply with the terms of the franchise agreement. These actions do not specifically address development funding, but rather cover general non-compliance.
Camp Margaritaville may choose to terminate the franchise agreement, suspend the franchisee's access to the CRS (central reservation system), or suspend access to advertising and marketing materials. Additionally, Camp Margaritaville can remove the franchisee from the Resort System Website and other advertising materials, suspend or terminate any fee reductions, and require additional Quality Assurance Audits.
Furthermore, Camp Margaritaville can mandate audited financial statements, require additional training for the franchisee or its employees, refuse operational support, or assess a fine of up to $500 per day for each day the non-compliance continues beyond thirty days after written notice. It is important to note that exercising these remedies does not constitute a termination of the agreement unless explicitly stated in writing, and the franchisee remains responsible for all fees and obligations during any suspension period.