Can the transition fee for changing Management Companies at a Camp Margaritaville location increase?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
n, covenants governing Franchisor's Confidential Information and non-competition covenants ("Management Rider"). Notwithstanding the foregoing, Franchisee acknowledges and agrees that compliance with the terms and obligations of this Agreement shall be Franchisee's responsibility even though Franchisee may retain a Management Company. If Franchisee changes the Management Company it is using to manage the Resort during the Term of this Agreement, then Franchisee shall pay a transition fee to Franchis
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, if a franchisee changes the Management Company managing their resort, they must pay a transition fee to Camp Margaritaville. This fee is intended to offset the costs Camp Margaritaville incurs while evaluating the new Management Company. The current transition fee is $5,000.
Camp Margaritaville retains the right to increase this transition fee. The increase would be implemented to account for any rise in Camp Margaritaville's expenses related to evaluating the new Management Company.
This means that the franchisee should be prepared for the possibility of paying more than $5,000 if they decide to switch Management Companies during the term of their franchise agreement. It is important to factor in potential fee increases when making decisions about management and budgeting for the resort's operational costs.