Is a transfer to a Competing Brand permitted under the Camp Margaritaville franchise agreement?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Transfer. In the event that Franchisee desires to effect a Change of Control or assign, sublicense or transfer its rights and/or obligations under this Agreement (each, a "Transfer"), Franchisee shall provide Franchisor notice of such anticipated Transfer as soon as reasonably practicable but in no event less than 30 days before the Transfer is to occur. Accompanying such notice, the transferee shall submit a copy of the then-current franchise application and the then-current application fee. Franchisor shall determine whether to approve the Transfer within 15 calendar days, which will not be unreasonably withheld if the following conditions are met:
- (i) the Transfer is not to a Competing Brand;
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to the 2025 Camp Margaritaville Franchise Disclosure Document, a transfer to a Competing Brand is not permitted. Specifically, the document states that in the event a franchisee desires to transfer its rights and obligations under the agreement, the transfer will not be approved if it is to a Competing Brand.
This restriction means that if a Camp Margaritaville franchisee wishes to sell or transfer their franchise, the potential buyer cannot be associated with a competing brand. This clause protects Camp Margaritaville's market position and proprietary information by preventing it from falling into the hands of competitors.
Furthermore, if Camp Margaritaville terminates the franchise agreement due to a transfer to a Competing Brand, the franchisor reserves the right to seek actual damages in addition to liquidated damages. This underscores the seriousness with which Camp Margaritaville views such a transfer and the potential financial repercussions for the franchisee.