What was the total investment in unconsolidated entities for the Camp Margaritaville brand company in 2022?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
majority owner (96.8%) of the resort foreclosed on its loan agreement and in December 2023, the lender assumed control of the property. Consequently, the company lost their ownership interest in the resort and fully impaired its investment of the property. The property remains open and continues to operate. The investment account for 560 MV Hotel LLC was $0 and $2,000,000 for the years ended December 31, 2023 and 2022, respectively. The impairment loss is reflected in net loss on investments in unconsolidated entities on the consolidated statements of operations.
Effective July 1, 2016, the Company owned a 20% interest in Lifestyle Brands. The Company contributed $1,848,203 and the right to use the brand name in exchange for its ownership interest. Lifestyle Brands was formed to benefit synergies among the consumer products licensing partners, which, in addition to private equity, are also investors in the entity. The Lifestyle Brands Operating Agreement included a clause in which certain financial metrics were to be met during the first two years of operations. These financial metrics were not met, and, as a result, the Company's
Notes to Consolidated Financial Statements (continued)
5. Investments in Unconsolidated Entities (continued)
ownership interest was diluted to 5.43% in 2019. On December 31, 2020, the private equity company divested of its interest in the entity, and ownership interest was subsequently increased to 49.9%. In March 2021, the license agreement, brand services agreement, and e-commerce agreement with Lifestyle Brands were terminated; however, it was agreed that the entity would be able to liquidate its remaining inventory. The Company continues to have significant influence over the entity, as it holds a seat on the board and is involved in key business decisions.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the investment account for Lifestyle Brands was $0 for the year ended December 31, 2022. Additionally, the investment account for 560 MV Hotel LLC was also $0 for the year ended December 31, 2022. These unconsolidated entities represent investments where Camp Margaritaville holds an ownership stake but does not fully control the entity's operations.
For a prospective franchisee, this information highlights how Camp Margaritaville manages its investments in other related businesses. The fact that the investment account for Lifestyle Brands was $0 in 2022 suggests that Camp Margaritaville's equity method accounting resulted in no recorded value for this investment during that period. Similarly, the $0 investment account for 560 MV Hotel LLC indicates that Camp Margaritaville did not have a recorded investment in this entity either.
It's important to note that these figures reflect the book value of the investments and not necessarily the actual market value or potential future returns. Franchisees should consider these investments as part of Camp Margaritaville's broader financial strategy and how they might indirectly impact the franchise system. Understanding the nature and performance of these unconsolidated entities can provide additional insight into the financial health and strategic direction of the Camp Margaritaville brand.
Prospective franchisees might want to inquire further about the nature of these unconsolidated entities, the extent of Camp Margaritaville's involvement in their operations, and any potential risks or benefits they could pose to the franchise system. This information can help franchisees make a more informed decision about investing in a Camp Margaritaville franchise.