Under what condition can the Camp Margaritaville agreement NOT be terminated by either party?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) All rights granted by Franchisor to the Franchisee under this Agreement are subject to the condition precedent that Franchisee shall render the Resort a Margaritaville-branded property as required and open the Resort to the public pursuant to this Agreement and the System Standards on or before the Opening Deadline. Notwithstanding the foregoing, it shall not be a breach of this Agreement if Franchisee's failure to open the Resort to the public as a Margaritaville-branded property by the Opening Deadline is caused by Franchisor or its Affiliates, or a Force Majeure Event.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to the 2025 Camp Margaritaville FDD, the franchise agreement cannot be terminated by either party if the failure to open the resort as a Margaritaville-branded property by the Opening Deadline is caused by Camp Margaritaville or its affiliates, or due to a Force Majeure Event. The Opening Deadline is (a) within 24 months after the Effective Date if the Resort is a new construction, or (b) within 18 months after the Effective Date (unless otherwise provided in the PIP, if applicable pursuant to Section 2.04) if the Resort is an adaptive reuse, as applicable.
This provision protects the franchisee from termination if delays in opening the Camp Margaritaville location are due to circumstances outside of their control, specifically actions or inactions by the franchisor or events considered a Force Majeure. A Force Majeure Event typically includes unforeseen circumstances such as natural disasters, war, or government regulations that make it impossible to fulfill the contractual obligations.
For a prospective Camp Margaritaville franchisee, this clause offers a degree of security, ensuring they won't lose their franchise if the opening is delayed due to the franchisor's actions or unavoidable external events. However, it's crucial for franchisees to understand what constitutes a Force Majeure Event as defined in the agreement and to maintain thorough documentation of any delays and their causes. Franchisees should also confirm that they have taken all reasonable steps to mitigate the impact of any delays.
It is important to note that this protection applies specifically to delays caused by Camp Margaritaville or a Force Majeure Event. Any other reasons for failing to meet the Opening Deadline could still result in termination of the agreement. Therefore, franchisees must diligently meet all other obligations and timelines outlined in the franchise agreement to avoid potential termination.