How does the litigation involving Margaritaville Enterprises in Item 3 relate to the use of Camp Margaritaville's trademarks as described in Item 13?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
ment in Orlando, Florida.
ITEM 3. LITIGATION
Other than the actions described below, there is no litigation that must be disclosed in this Item.
Boss Investments Limited a/k/a Boss Investments Ltd. v. Margaritaville of Bahamas, LLC, Margaritaville Enterprises, LLC, Margaritaville Holdings LLC, and James Wiseman (Circuit Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, Case No. 2018-Ca-013658).
On October 26, 2018, Boss Investments Ltd. ("Boss") filed a complaint against Margaritaville of Bahamas, LLC, Margaritaville Enterprises, LLC, Margaritaville Holdings LLC, and James Wiseman, seeking a declaratory judgment, permanent injunctive relief, and damages. The complaint arose out of a Trademark Sub-License Agreement, dated as of June 4, 2014, by and between Margaritaville of Bahamas, LLC and Boss ("Boss Agreement"). Boss alleged that another trademark license agreement signed by the defendants in connection with a resort development in the Bahamas that includes a hotel and condominiums ("Bahamian Hotel"), violated the Boss Agreement.
This matter was settled pursuant to the Amended Confidential Mediated Settlement Agreement (the "Settlement Agreement") and Third Amendment to Trademark Sub-License Agreement, dated as of December 30, 2020. Pursuant to the Settlement Agreement, the case was voluntarily dismissed with prejudice as of January 8, 2021. Without admitting any liability for the claims, under the Settlement Agreement, the corporate defendants agreed to pay to Boss 50 percent of future royalties from food and beverage, and certain merchandise, from the Bahamian Hotel. As part of the Settlement Agreement, prior restrictions under the Boss Agreement in the Bahamas were released except for certain restrictions in Paradise Island and Nassau.
Stephen W. and Catherine C. Shultz, as Co-Trustees of the Stephen and Catherine Shultz Trust Dated January 9, 2006; Alesandra D. Shultz, as Trustee of the Alesandra D. Shultz Living Trust U/A/D April 12, 2018; and John D. Koptieff, and Wife, Susan C. Koptieff v. Margaritaville Enterprises, LLC; John Cohlan; and James Wiseman (Circuit Court of the Ninth Judicial Circuit in and for Osceola County, Florida, Case No. 2020 CA 00051 OC).
On April 12, 2021, the above-named plaintiffs (collectively, "Plaintiffs") filed a Third Amended Complaint against the above-named defendants (collectively, "Schultz Defendants"), after its Second Amended Complaint ("SAC") was dismissed by the Court on February 25, 2021. Plaintiffs allegedly own cottages at the Margaritaville Resort in Osceola County, which they rent to vacationers. Plaintiffs filed a First Amended Complaint ("FAC") on March 13, 2020 against nearly every individual and entity remotely connected with the resort. The FAC consisted of 5 different Plaintiffs suing 44 different defendants (including the 9 Margaritaville Defendants) for numerous purported torts, including fraud; negligent misrepresentation; tortious interference; violation of Florida's Deceptive and Unfair Trade Practices Act and civil conspiracy. On August 7, 2020, the Margaritaville Defendants filed a Motion to Dismiss the FAC, for failing to comply with fundamental rules of pleading, and failure to state a claim as a matter of law. Following a hearing, a Second Amended Complaint was filed on November 12, 2020. The Defendants filed a Motion to Dismiss the Second Amended Complaint on December 2, 2020, which the Court granted on February 25, 2021. A Third Amended Complaint was filed on April 12, 2021. The allegations remain substantially the same as in the FAC. At a hearing on November 1, 2021, the Margaritaville Defendants' Motion to Dismiss Third Amended Complaint was denied. Margaritaville Defendants filed their Answer to Third Amended Complaint on December 8, 2021. On April 27, 2023, the parties entered into a Settlement Agreement, agreeing to terminate and resolve the case through a mutual walk-away and dismissal of the case with prejudice, with each party bearing its own attorneys' fees and costs. The case was dismissed with prejudice on April 27, 2023.
The Commissioner of Financial Protection and Innovation v. Margaritaville Hotels & Resorts, LLC (Administrative Proceeding Before the Department of Financial Protection and Innovation, State of California).
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, Item 3 discloses a past litigation case involving Margaritaville Enterprises, LLC, one of Camp Margaritaville's parent companies, and its impact on trademark licensing. Specifically, the litigation, Boss Investments Limited a/k/a Boss Investments Ltd. v. Margaritaville of Bahamas, LLC, Margaritaville Enterprises, LLC, Margaritaville Holdings LLC, and James Wiseman, concerned a dispute over a Trademark Sub-License Agreement. The suit was filed on October 26, 2018, and voluntarily dismissed with prejudice as of January 8, 2021, following an Amended Confidential Mediated Settlement Agreement. The corporate defendants agreed to pay Boss 50 percent of future royalties from food and beverage, and certain merchandise, from the Bahamian Hotel. As part of the Settlement Agreement, prior restrictions under the Boss Agreement in the Bahamas were released except for certain restrictions in Paradise Island and Nassau. This case is relevant to Item 13 because it demonstrates the importance of Margaritaville Enterprises' role in managing and licensing the MARGARITAVILLE trademark. Margaritaville Enterprises granted Margaritaville RV Resorts, LLC the rights to use and sublicense the Camp Margaritaville Intellectual Property under a trademark license agreement dated January 14, 2019.
Item 13 details that Margaritaville Enterprises owns multiple federal trademark registrations for the MARGARITAVILLE trademark. They have granted Camp Margaritaville the rights to use and sublicense the Camp Margaritaville Intellectual Property via a Trademark License Agreement. This agreement's term is tied to the sub-licenses or franchise agreements with Camp Margaritaville Resort developers/operators, meaning it remains in effect as long as any such sub-license or franchise agreement is active. The agreement cannot be terminated, and remedies for breach are limited to monetary damages and equitable remedies, excluding termination.
The litigation disclosed in Item 3 highlights the potential complexities and disputes that can arise from trademark licensing agreements. While the case was settled, it underscores the need for Camp Margaritaville to carefully manage its trademark rights and ensure compliance with all licensing agreements. For a prospective franchisee, this means understanding the terms of the Trademark License Agreement and the potential impact of any existing or future litigation involving Margaritaville Enterprises on their ability to use the Camp Margaritaville Intellectual Property. The franchisee must also adhere to the System Standards and obtain franchisor approval for any use of the Camp Margaritaville Intellectual Property, especially online.
The FDD also states that Margaritaville Enterprises has the exclusive right to use and sublicense intellectual property rights related to works authored by Jimmy Buffett that are 100% owned and controlled by him, and a non-exclusive right to sublicense Jimmy Buffett's personality rights. This further emphasizes the importance of Margaritaville Enterprises in controlling and licensing the brand's intellectual property. The only listed encumbrance against the Camp Margaritaville Intellectual Property is a security interest granted to HPS Investment Partners, LLC, from whom a non-disturbance certificate will be obtained within 30 days of signing the Franchise Agreement.