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Under what circumstances can the Camp Margaritaville Franchisor immediately terminate the Franchise Agreement without providing a 30-day notice and opportunity to cure?

Camp_Margaritaville Franchise · 2025 FDD

Answer from 2025 FDD Document

ertificates of insurance to Franchisor as required under this Franchise Agreement;

  • (m) Franchisee, or its Affiliates, fail to make payment when due to any landlord, secured lender, or mortgage holder of the Resort;
  • (n) Franchisee misuses or makes any unauthorized use of the Camp Margaritaville Intellectual Property; or
  • (o) The Management Company does not meet Franchisor's minimum qualifications or if Franchisee or the Management Company becomes a Brand Owner.

Section 13.03 Events of Default Without Opportunity to Cure. Franchisor may, but has no duty to, exercise any of the remedies in Article XIV including, but not limited to terminating this Agreement if any of the following occur, all of which shall constitute an Event of Default by Franchisee under this Agreement, immediately upon the occurrence of such Event of Default (or the earliest date permitted by law) without notice to Franchisee:

(a) Franchisee or its Owners is discovered to have misrepresented or omitted a material fact which induced Franchisor to enter into this Agreement;

  • (b) Franchisee fails to open and begin operating the Resort by the Opening Deadline (as may be extended pursuant to Section 2.08(b));
  • (c) Franchisee (i) on 3 or more separate occasions within a period of 12 consecutive months or (ii) on 2 or more separate occasions within a period of 6 consecutive months, in each case, fails to comply with any obligation under this Agreement, the System Standards, or the Manual, or fails to achieve a passing score on a Quality Assurance Audit, regardless of whether the failures relate to the same or different obligations under this Agreement, the System Standards, or the Manual. This Section 13.03(c) shall apply regardless of whether Franchisor provides formal written notice to Franchisee upon such prior occasions or Franchisee corrects the failures;
  • (d) Franchisee or any of its Owners or Guarantors is, or is discovered to have been, convicted of a felony or a crime involving fraud, or enters or is discovered to have entered a plea of no contest to a felony or a crime involving fraud; unless (i) the owner does not have Control over the Franchisee; (ii) the conviction, plea or crime is not likely, in Franchisor's reasonable opinion, to reflect materially adversely upon Franchisor, its Affiliates or the Camp Margaritaville Intellectual Property, whether on a local, regional or national scale; and (iii) the owner divests all of such owner's direct and indirect ownership interests in Franchisee within 60 days after the date of the conviction or plea;
  • (e) Franchisee knowingly maintains false books and records of account or knowingly submits false or misleading reports or information to Franchisor, including any information Franchisee provided or failed to provide on its franchise application;
  • (f) Franchisee (or any of its owners) knowingly makes any unauthorized use or disclosure of any part of the Manual or any other Confidential Information;
  • (g) Franchisee ceases operating the Resort at the Site under the Camp Margaritaville Intellectual Property for 3 consecutive days, fails to identify the Resort to the public as a Camp Margaritaville Resort, or loses possession of or the right to possess all or a significant part of the Resort, for any reason;
  • (h) If Franchisee attempts a Transfer without duly notifying Franchisor and receiving Franchisor's approval, or despite Franchisor's valid disapproval;
  • (i) If Franchisee is determined by a Competent Authority to have sold defective, contaminated, or adulterated food or beverage at any Food and Beverage Service on 2 or more separate instances during any 12-month period of time that is determined to be the cause for one or more customers to seek medical treatment that includes in-patient medical treatment at a hospital or results in serious injury or death, as determined by a Competent Authority. For the avoidance of doubt, if the same shipment or allotment of defective, contaminated, or adulterated food or beverage causes more than one customer to seek such medical treatment, then this shall be considered one instance. This Section 13.03(i) shall not, however, include any instance of in-patient medical treatment at a hospital, serious injury or death, if it is due to a cause which the Franchisee could not have prevented by using commercially reasonable practices.

Source: Item 23 — RECEIPTS (FDD pages 72–406)

What This Means (2025 FDD)

According to Camp Margaritaville's 2025 Franchise Disclosure Document, there are several circumstances that allow the franchisor to immediately terminate the franchise agreement without providing the standard 30-day notice and opportunity to cure. These events are considered significant breaches of the agreement.

Camp Margaritaville can terminate the agreement immediately if a franchisee misrepresents or omits a material fact that induced the franchisor to enter into the agreement. Immediate termination can also occur if the franchisee fails to open and begin operating the resort by the specified Opening Deadline, or if the franchisee or its owners are convicted of a felony or a crime involving fraud. However, the felony conviction may not trigger immediate termination if the owner does not have control over the franchisee, the crime is not likely to reflect negatively on Camp Margaritaville, and the owner divests their ownership within 60 days.

Additional causes for immediate termination include violating any applicable law, failing to comply with System Standards that present an immediate threat to public health or safety, using unauthorized suppliers, failing to offer required products, offering unapproved products, making unauthorized changes to the resort's design, failing to maintain sufficient inventory, failing to maintain health and sanitation procedures that pose an immediate threat to public health or safety, defaulting under any other agreement with the franchisor, refusing inspection access, key personnel being unable or unwilling to complete the Training Program, failing to submit certificates of insurance, failing to make payments to landlords or lenders, misusing Camp Margaritaville Intellectual Property, or if the Management Company does not meet the franchisor's minimum qualifications or becomes a Brand Owner.

These stipulations highlight the importance of adhering to all aspects of the franchise agreement, System Standards, and applicable laws. For a prospective Camp Margaritaville franchisee, understanding these potential triggers for immediate termination is crucial to avoid jeopardizing their investment and franchise rights. Franchisees should ensure full compliance with all requirements and maintain open communication with the franchisor to address any concerns promptly.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.