In Washington, is Camp Margaritaville allowed to restrict a franchisee from soliciting or hiring employees of other franchisees or the franchisor?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 9.01 In-Term Restrictive Covenants. Franchisee specifically acknowledges that Franchisee and its Owners will receive access to valuable specialized training and Confidential Information, and that such specialized training and Confidential Information provide a competitive advantage to all Camp Margaritaville Resorts. During the Term, neither Franchisee, its Affiliates, nor any of its Owners shall, directly or indirectly, for itself or themselves or through, on behalf of, or in conjunction with, any other Person:
- (a) Divert or attempt to divert business or potential business from any Camp Margaritaville Resorts (including the Resort) to any other competing business or perform any other act injurious or prejudicial to the goodwill associated with the Camp Margaritaville Intellectual Property or the Camp Margaritaville System;
- (b) Authorize, assist, or induce another to take any action that Franchisee or its Owners would be prohibited from taking directly pursuant to this Section 9.01.
- (c) Authorize any "bundling" of the Hotel in Franchisee's volume deals with third-party agencies or services, unless approved by Franchisor in its sole discretion; or
- (d) Staff the Hotel with any revenue management, sales, or marketing personnel that also support non-Margaritaville-branded lodging locations.
Section 9.02 Directives. In the event of any dispute related to this Article IX, Franchisee and its Owners direct any third-party construing this Section, including without limitation any court, mediator, arbitrator, master, or other party acting as trier or fact or law:
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
Based on the 2025 Camp Margaritaville Franchise Disclosure Document, Section 9.01 outlines in-term restrictive covenants for franchisees and their owners. These covenants aim to protect Camp Margaritaville's business interests, confidential information, and the goodwill associated with the brand.
Specifically, during the term of the franchise agreement, franchisees and their owners are prohibited from diverting business away from any Camp Margaritaville Resorts, including their own, to competing businesses. They are also barred from assisting or inducing others to take actions that the franchisee themselves are prohibited from doing. Furthermore, franchisees cannot staff their hotels with revenue management, sales, or marketing personnel who also support non-Margaritaville-branded lodging locations.
The FDD states that any disputes related to these restrictions will be interpreted under laws governing commercial contracts, not employment contracts. It also emphasizes that any violation of these terms will be presumed to involve the misappropriation of confidential information and will be considered a deceptive and unfair trade practice. While these covenants broadly protect the Camp Margaritaville system, the FDD excerpts provided do not explicitly state whether Camp Margaritaville can restrict a franchisee from soliciting or hiring employees of other franchisees or the franchisor in Washington.