Is Camp Margaritaville permitted to assign its rights or obligations under the franchise agreement without the franchisee's approval?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise or other agreement | Summary | |
|---|---|---|---|
| j. | Assignment of contract by franchisor | Section 12.01 | Franchisor may assign all rights or obligations without approval. |
| Provision | Section in franchise or other agreement | Summary | |
| ---- | ------------------------------------------------------------------------------ | -------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| k. | "Transfer" by franchisee - defined | Section 12.02(a); Section 6.9 (DR) | A change of control, assignment, sublicense, or transfer of the rights and or obligations under the franchise agreement. |
| l. | Franchisor approval of transfer by franchisee | Section 12.02 | Franchisee must obtain approval of franchisor for any transfer that results in a change in ownership |
| m. | Conditions for franchisor approval of transfer | Section 12.02(a) | Conditions include transfer cannot be to a Competing Brand; cannot materially harm the franchisor; approval of the proposed transferee and its owners; franchisee has paid all amounts due and is in substantial compliance with obligations; transferee's proposed management company of transferee meets franchisor's requirements; transferee signs then current form of franchise agreement; transferee remodels the Resort to then current standards; and franchisee signs a termination agreement and release. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 64–68)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, Camp Margaritaville has the right to assign its rights and obligations under the franchise agreement without needing approval from the franchisee. This is detailed in Item 17, which covers renewal, termination, transfer, and dispute resolution.
This provision means that Camp Margaritaville can transfer the franchise agreement to another party without the franchisee's consent. This could involve selling the entire franchise system to a new company or assigning specific responsibilities to a third party. For a prospective franchisee, this signifies a lack of control over who ultimately manages the franchise system and makes decisions affecting their Camp Margaritaville location.
While this is permitted, franchisees also have the ability to transfer their franchise, but it is not as straightforward. The franchisee must obtain approval from Camp Margaritaville for any transfer that results in a change of ownership. This process includes meeting several conditions, such as ensuring the transfer is not to a competing brand, does not harm Camp Margaritaville, and that the proposed transferee and its owners are approved by Camp Margaritaville. The franchisee must also be in substantial compliance with their obligations and have paid all amounts due. The transferee must sign the current form of the franchise agreement and remodel the resort to current standards, while the franchisee must sign a termination agreement and release.