What was the total value of the Camp Margaritaville brand company's investment in unconsolidated entities 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.
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.
Camp Margaritaville's investments in unconsolidated entities are recorded at cost less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. An unconsolidated entity is one in which Camp Margaritaville has an investment but does not have complete control, such as Lifestyle Brands and 560 MV Hotel LLC.
For a prospective franchisee, this indicates that Camp Margaritaville may make strategic investments in other related businesses, but these investments may not always generate immediate returns or be of significant value. The FDD indicates that the value of these investments can fluctuate and may even be reduced to zero due to impairment or changes in ownership, as was the case with 560 MV Hotel LLC. It's important to note that these investments are separate from the franchise operations but could potentially impact the overall financial health of the company.
Prospective franchisees should consider the franchisor's investment strategy and how it aligns with the overall brand and franchise system. Understanding the nature and performance of these investments can provide additional insight into the financial management and strategic direction of Camp Margaritaville.