What is the process for dividing damages or settlement awards received in connection with a Camp Margaritaville infringement claim?

According to the 2025 Camp Margaritaville FDD, the franchisor, not the franchisee, is entitled to receive and retain all amounts awarded as damages, profits, or otherwise in connection with intellectual property infringement suits. This applies to actions, not caused by any breach of the agreement by the franchisee, that the franchisor may choose to bring to protect its Margaritaville Intellectual Property or Margaritaville Artwork. The franchisor also has the right to employ counsel of its own choice to direct the handling of such claims and any settlement thereof, at the franchisor's cost and expense.

However, the franchisee is expected to assist the franchisor (and its affiliates) in connection with any intellectual property claims dealing with the enforcement of the franchisor's (and its affiliates') rights in the Margaritaville Intellectual Property or Margaritaville Artwork that the franchisor (and its affiliates) may choose to bring. The franchisor agrees to reimburse the franchisee's reasonable out-of-pocket expenses incurred in providing such assistance.

This arrangement means that while a Camp Margaritaville franchisee is obligated to support the franchisor's intellectual property protection efforts, they do not directly benefit from any financial recoveries resulting from those efforts. The franchisee's main benefit is the continued protection of the brand and its associated intellectual property, which helps maintain the value and reputation of the Camp Margaritaville system. Franchisees should ensure they understand the scope of their required assistance and the process for reimbursement of expenses.