How does the loss on extinguishment of debt for Camp Margaritaville compare between 2022 and 2023?
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 company experienced a net loss on the extinguishment of debt in 2022, while in 2023, there was no loss recorded. Specifically, in 2022, the net loss on the extinguishment of debt was $4,336,839. In 2023, the net loss on extinguishment of debt was $0.
This indicates a significant improvement in Camp Margaritaville's financial position regarding debt management between the two years. The absence of a loss on debt extinguishment in 2023 suggests that the company either restructured its debt more favorably or did not have to settle debt at a loss during that year. This could be a positive sign for potential investors, as it reflects better financial management and reduced risk associated with debt obligations.
Prospective franchisees should consider this information in the context of the overall financial health of Camp Margaritaville. While the elimination of this loss is a positive development, it is essential to investigate the reasons behind the previous loss in 2022 and the subsequent improvement. Understanding the company's debt management strategies and their impact on profitability is crucial for making an informed investment decision.