What are the three conditions under which either party may terminate the Camp Margaritaville agreement due to casualty?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
non-substantial, then Franchisee shall promptly make whatever changes to the plans, repairs and restoration as may be necessary to make the Resort conform substantially to the condition, character, and appearance immediately prior to such taking, according to plans and specifications approved as required by this Agreement. Franchisee shall take all commercially reasonable measures necessary to ensure that the development and operation of the Resort is not unreasonably delayed.
Section 15.02 Termination Upon Casualty. If the Resort is damaged by fire or other casualty and: (i) the cost of restoration exceeds 30% of the replacement cost of the Resort (excluding land, excavations, footings and foundations); (ii) the estimated length of time required to restore the Resort substantially to its pre-casualty condition and character is more than 180 days, as indicated by an architect's certificate or other evidence reasonably satisfactory to Franchisor; or (iii) insufficient proceeds of insurance do not permit Franchisee to rebuild and restore the Resort to the standards required by this Agreement, then either Party may terminate this Agreement by delivering written notice to the other Party within 90 days after the occurrence of the casualty. In such event, there shall be no liquidated damages, provided that, if such termination is effectuated by Franchisee and within 3 years after the date of such termination, Franchisee, any of its Affiliates, or any member of Fra
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, Section 15.02 outlines the conditions under which either the franchisor or the franchisee can terminate the franchise agreement due to damage from fire or other casualty.
The first condition is when the cost to restore the Camp Margaritaville resort exceeds 30% of its replacement cost, excluding the land, excavations, footings, and foundations. This means that if a significant portion of the resort's structure is damaged, making restoration financially impractical, either party can opt to terminate the agreement.
The second condition allowing for termination is if the estimated time to restore the resort to its pre-casualty condition is more than 180 days. This timeline must be supported by an architect's certificate or other evidence satisfactory to Camp Margaritaville. This protects both parties if the damage is so extensive that it would take an unreasonably long time to repair, preventing the resort from generating revenue. The third condition is if the insurance proceeds are insufficient to cover the cost of rebuilding and restoring the resort to the standards required by the franchise agreement. This ensures that if adequate funding isn't available through insurance, either party can terminate the agreement rather than being forced to operate a substandard or incomplete resort.