What was the loss on investment in unconsolidated entities for Camp Margaritaville in 2022?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
nt to sell certain venues, including domestic licensing rights, in perpetuity, to International Meal Company, Inc. to operate several pre-existing restaurants. Additionally, the sale applied to venue and expansion units that were not opened at the time of the sale. The last expansion unit opened in Atlanta, Georgia, on June 24, 2022. The purchase price, calculated as a multiple of the venues' earnings during the first 12 months of operations, has not yet been finalized, but was estimated to be $1,902,027 as of December 31, 2022. After assessing the venue's earnings in 2023, the company updated their estimate of the purchase price, which is estimated to be nil. In addition to cash proceeds, the Company will also receive ongoing royalty payments based on each venue's monthly net sales.
The breakdown of components of the asset sale to IMC for the year ended December 31, 2023, is outlined in the table below:
| Total purchase price, net of adjustments | $ | – |
|---|---|---|
| Fixed assets | (2,847,174) | |
| Development costs | (2,100,000) | |
| Inventory | (126,279) | |
| Loss on disposal of venue | $ (5,073,453) |
Proceeds from the sale are reflected in the notes receivable balance. Notes accrue interest at a rate of 5.75% per annum and are payable quarterly ov
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the investment account for 560 MV Hotel LLC was $2,000,000 for the year ended December 31, 2022.
Camp Margaritaville had a 3.2% interest in 560 MV Hotel LLC (a resort in New York, New York) and did not have significant influence over the entity. The investment was accounted for at cost less impairment. In October 2023, the majority owner (96.8%) of the resort foreclosed on its loan agreement and in December 2023, the lender assumed control of the property. Consequently, Camp Margaritaville lost their ownership interest in the resort and fully impaired its investment of the property.
The impairment loss is reflected in net loss on investments in unconsolidated entities on the consolidated statements of operations. The investment account for Lifestyle Brands was $0 for the years ended December 31, 2023 and 2022.