Under what conditions does the Lodge Royalty fee apply to a Camp Margaritaville franchise?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Lodge Royalty.
All Resorts with Lodges must pay the Lodge Royalty fee equal to 5% of the "Gross Lodge Revenue," which means all revenue generated through rentals of guest rooms at the Lodge, excluding: (a) federal, state, or municipal excise, room, sales, or use taxes, or similar taxes collected from guests and paid to an applicable governmental authority; (b) gratuities, service charges, or similar receipts collected and then paid directly to staff; (c) any royalties, residuals, license fees, sublicense fees, or other related amounts paid to you connected to use of any intellectual property not owned by us or our affiliates; (d) fees paid to third party agents for bookings at the Resort including Lodge bookings, group and event sales; (e) any sale of fixtures, machinery, or other equipment that is not in the ordinary course of your business; (f) any gift card, coupons, or the like at the time of purchase, but which shall be included Gross Revenue upon redemption; (g) any sale or transfer of all or a substantial part of your assets unless otherwise provided for in the Franchise Agreement; (h) charges paid by you to credit card companies as fees for processing; and (i) any other adjustments to revenue in conformance with the Uniform System.
Source: Item 6 — OTHER FEES (FDD pages 20–34)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, a Lodge Royalty fee is applicable to franchises with Lodges. Specifically, all Camp Margaritaville Resorts that have Lodges are required to pay a Lodge Royalty fee. This fee is equivalent to 5% of the Gross Lodge Revenue.
Gross Lodge Revenue is defined as all revenue generated through rentals of guest rooms at the Lodge. However, certain revenues are excluded from this calculation, including: federal, state, or municipal excise, room, sales, or use taxes collected from guests and paid to governmental authorities; gratuities or service charges paid directly to staff; royalties related to intellectual property not owned by the franchisor; fees paid to third-party agents for bookings; sales of fixtures or equipment outside the ordinary course of business; the initial purchase of gift cards or coupons (though redemption values are included); sales or transfers of assets; credit card processing fees; and other adjustments conforming to the Uniform System of Accounts.
In practical terms, if a Camp Margaritaville franchisee operates a resort with a lodge, they must remit 5% of their guest room rental revenue (with the listed exclusions) to the franchisor as a royalty. This is a recurring fee that impacts the franchisee's revenue stream and must be factored into their financial projections. Franchisees should carefully review the definition of Gross Lodge Revenue and its exclusions to accurately calculate and remit this royalty fee.