What was the loss on extinguishment of debt for Camp Margaritaville in 2022?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
| Year Ended December 31 | ||
|---|---|---|
| 2023 | 2022 | |
| Revenues | ||
| Restaurant and retail merchandise sales | $ 6,784,532 | $ 6,487,545 |
| Restaurant royalties | 10,166,895 | 9,033,781 |
| Resort royalties | 29,097,964 | 26,963,473 |
| Residential and timeshare royalties | 35,130,754 | 21,691,627 |
| Consumer products royalties | 4,199,315 | 4,705,602 |
| Other revenue | 7,108,803 | 5,978,600 |
| Total revenues | 92,488,263 | 74,860,628 |
| Operating expenses | ||
| Cost of restaurant and retail merchandise sales | 1,814,546 | 1,740,415 |
| Selling, general, and administrative | 65,463,612 | 47,750,487 |
| Depreciation | 1,433,243 | 1,420,259 |
| Total operating expenses | 68,711,401 | 50,911,161 |
| Income from operations | 23,776,862 | 23,949,467 |
| Other income (expenses) | ||
| Net (loss) gain from investments in unconsolidated entities | ( 2,000,000) | 375,000 |
| Net loss on sale of venues | ( 1,902,027) | ( 3,171,426) |
| Net gain on insurance proceeds | 20,088,815 | – |
| Net loss on extinguishment of debt | – | ( 4,336,839) |
| Interest income | 808,337 | 208,929 |
| Interest expense | ( 9,421,558) | |
| ( 12,330,510) | ||
| Net income before income taxes | 28,441,477 | 7,603,573 |
| Income taxes | 656,806 | 359,741 |
| Net income from continuing operations | $ 27,784,671 | $ 7,243,832 |
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the net loss on extinguishment of debt for the year ended December 31, 2022, was $4,336,839.
This figure represents a financial loss incurred by Camp Margaritaville due to the settlement or elimination of debt before its scheduled maturity date. This can occur for various reasons, such as refinancing debt at a lower interest rate or restructuring the company's financial obligations.
For a prospective franchisee, this historical data point provides insight into Camp Margaritaville's past financial management and debt-related activities. While a loss on debt extinguishment is not inherently negative (as it can be part of a strategic financial maneuver), it's important to understand the context and reasons behind it. A potential franchisee may want to inquire about the specifics of this loss and how Camp Margaritaville manages its debt obligations to ensure financial stability and responsible practices.