What was the loss on investment in unconsolidated entities for Camp Margaritaville in 2023?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
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 company experienced a loss on investment in unconsolidated entities in 2023 due to its investment in 560 MV Hotel LLC. Camp Margaritaville owned a 3.2% interest in this resort located in New York, New York, but did not have significant influence over the entity. This 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. As a result, Camp Margaritaville lost its ownership interest in the resort and fully impaired its investment. The investment account for 560 MV Hotel LLC was $0 for the year ended December 31, 2023.
The impairment loss from this investment is reflected in the net loss on investments in unconsolidated entities within Camp Margaritaville's consolidated statements of operations. This indicates that the loss was recognized as a reduction in the company's overall profit due to the write-down of the impaired asset.