What revenue sources are excluded from the definition of 'Gross Revenue' for a Camp Margaritaville?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Gross Revenue shall exclude only: (a) free or discounted rooms and upgrades or other "comps" for which the Resort collects no revenue or in-kind value for; (b) federal, state, or municipal excise, room, sales, or use taxes, or similar taxes collected from guests and paid to an applicable governmental authority; (c) gratuities, service charges, or similar receipts collected and then paid directly to staff; (d) any sale of fixtures, machinery, or other equipment that is not in the ordinary course of your business; (e) any gift card, coupons, or the like at the time of purchase, but which shall be included in Gross Revenue upon redemption; (f) any complimentary breakfast service; and (g) any other adjustments to revenue in conformance with accounting principles generally accepted in the United States ("GAAP") and the Uniform System of Accounts for the Lodging Industry, 11th Edition (Educational Institute of the American Hotel and Motel Association, publisher), or a later edition we approve ("Uniform System") (excluding any adjustment that excludes resort fees and the like).
We and you will account for Gross Revenue according to the Uniform System.
Source: Item 6 — OTHER FEES (FDD pages 20–34)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, 'Gross Revenue' is a critical figure, as it is the base for calculating royalty fees. However, not all income is included in this calculation. Specifically, the following are excluded from Gross Revenue: free or discounted rooms and upgrades for which the resort collects no revenue or in-kind value, federal, state, or municipal excise, room, sales, or use taxes collected from guests and paid to a governmental authority, gratuities and service charges collected and paid directly to staff, and revenue from the sale of fixtures, machinery, or other equipment not in the ordinary course of business. Additionally, the initial purchase of gift cards or coupons is excluded, though their value is included in Gross Revenue upon redemption. Revenue adjustments conforming to GAAP and the Uniform System of Accounts for the Lodging Industry are also excluded. Complimentary breakfast service is also excluded from gross revenue.
For a Camp Margaritaville franchisee, understanding these exclusions is essential for accurate financial reporting and royalty fee calculation. By excluding these items, the franchisee only pays royalties on the actual revenue they retain. This can significantly impact the profitability of the franchise, as it reduces the royalty burden.
It is important to note that the definition of Gross Revenue and its exclusions are subject to the specific terms outlined in the Franchise Agreement. Franchisees should carefully review these terms and consult with financial professionals to ensure compliance and accurate reporting. The FDD specifies that Camp Margaritaville and the franchisee will account for Gross Revenue according to the Uniform System of Accounts for the Lodging Industry.