Upon termination of a Camp Margaritaville franchise, who is responsible for paying any outstanding fees due to Margaritaville?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
upon expiration or termination of this Agreement.
- (d) Franchisee further acknowledges and agrees that any violation of this Section 16.02 constitutes trademark infringement, service mark infringement, unfair competition, false advertising, and/or deceptive trade practices pursuant to federal, state, and common law, that such violation encroaches on the goodwill associated with Franchisor's brand, and that such violation is likely to cause confusion among reasonably prudent consumers.
Section 16.03 Franchisee Fee Obligations. Upon the expiration or earlier termination of this Agreement for any reason, all accrued and unpaid Royalties and Marketing Fees due at the time of expiration or termination shall become due and payable within 30 days following the later of such expiration or termination.
Section 16.04 Technology Services. Upon expiration or termination of this Agreement, Franchisee must cease use of the CRS, or any other technology connected to the Camp Margaritaville System, including, but not limited to the CRM System, PMS, POS System, employee performance platform and CMS. Franchisee, however, shall remain obligated to any third parties for payments due and owing under any separate agreement for services that they may have with such third-party vendors.
Section 16.05 Liquidated Damages.
- (a) Upon the termination of this Agreement under Section 14.01 by Franchisor, Franchisee shall pay to Franchisor an amount equal to $50,000 mul
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to Camp Margaritaville's 2025 Franchise Disclosure Document, the franchisee is responsible for paying all outstanding royalties and marketing fees upon termination or expiration of the franchise agreement. Specifically, all accrued and unpaid Royalties and Marketing Fees due at the time of expiration or termination become due and payable within 30 days following the termination or expiration date.
Additionally, the franchisee is obligated to continue payments to third-party vendors for services rendered under separate agreements, even after the termination of the Camp Margaritaville franchise agreement. This means that if a franchisee has agreements with other companies for services like technology or other operational needs, they must continue to fulfill those financial obligations independently of their franchise agreement with Camp Margaritaville.
Furthermore, if Camp Margaritaville terminates the agreement due to the franchisee's actions, the franchisee may also be required to pay liquidated damages. These damages could amount to $50,000 multiplied by the lesser of the remaining months in the term or 36 months. This amount is considered a pre-estimate of the losses Camp Margaritaville would incur due to the termination and serves as a complete satisfaction of the franchisee's obligations under the agreement. This highlights the importance of adhering to the franchise agreement to avoid potentially significant financial repercussions upon termination.