How many non-vested shares did Camp Margaritaville have as of December 31, 2023, and what was their fair value?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
See accompanying notes.
Notes to Consolidated Financial Statements
December 31, 2023
1. Description of the Company
Margaritaville Holdings LLC (the Company) was formed on September 5, 1997, under the laws of the State of Delaware. Affairs of the Company are governed by its Operating Agreement (the Operating Agreement). The Company has issued 10,000 total interests designated as "Class A Interests", 538 interests designated as "Class B Interests", and is authorized to issue up to 1,860 total interests designated as "Class C Interests". The Company has a Governing Board that is comprised of appointees from the three largest A interest holders. Class B and C Interests are nonvoting. No Member shall be liable for the Debts or any other obligations or liabilities of the Company solely by reason of being a Member. The Company shall be indefinite in duration, subject to the provisions for termination in the Operating Agreement.
Company income and losses are allocated in accordance with the Operating Agreement. The Company licenses its intellectual property, themed after the lifestyle of Jimmy Buffett, to a collection of resorts, residential communities, and various consumer product companies. The resort portfolio includes hotels, timeshares, casinos, campgrounds, and a cruise ship. The Company also licenses or operates a chain of restaurants and retail stores. There are Margaritaville venues in the United States, Mexico, Canada, the Caribbean, and Central America.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Margaritaville Holdings LLC had specific capital interests as of December 31, 2023. The company had issued 10,000 Class A Interests and 538 Class B Interests. Additionally, it was authorized to issue up to 1,860 Class C Interests. The document specifies that Class B and Class C Interests are nonvoting. However, the FDD does not specify how many of the authorized Class C Interests were actually issued or the value of any non-vested shares.
For a prospective Camp Margaritaville franchisee, understanding the capital structure of the parent company can provide insights into the company's financial stability and governance. The different classes of interests (A, B, and C) indicate varying rights and levels of control within the company. The fact that Class B and C Interests are nonvoting suggests that control is concentrated among the Class A interest holders.
Because the FDD does not state the number of non-vested shares or their value, it is important for a potential franchisee to ask Camp Margaritaville's management for clarification on the number of Class C shares issued, the vesting schedule, and the fair value of non-vested shares. This information can help in assessing the potential impact of these shares on the company's equity and future performance.