Margaritaville Hotels & Resorts Franchise

Financing Details

No financing is offered by Margaritaville Hotels & Resorts. Franchisees are responsible for arranging their own funding, and the franchisor does not guarantee any notes, leases, or other obligations.

Litigation Summary

Margaritaville Hotels & Resorts and its affiliates have been involved in three legal actions. One case, filed in October 2018 by Boss Investments Ltd., concerned a trademark sub-license agreement related to a Bahamian resort. This matter was settled and voluntarily dismissed with prejudice in January 2021, with the corporate defendants agreeing to pay 50% of future royalties from food, beverage, and certain merchandise from the Bahamian hotel. A second case, filed in April 2021 by Stephen W. and Catherine C. Shultz as trustees, alleged fraud, negligent misrepresentation, tortious interference, and deceptive trade practices related to cottages at a Margaritaville Resort. This lawsuit was dismissed with prejudice in April 2023 following a mutual walk-away settlement. The third action involved an administrative proceeding with the California Department of Financial Protection and Innovation. Margaritaville Hotels & Resorts voluntarily acknowledged not filing a required notice of exemption and paying a fee for three hotel sales in California between July 2019 and February 2020. In March 2020, a consent order was agreed upon, requiring Margaritaville Hotels & Resorts to desist from further violations, pay a $7,500 administrative penalty, and amend its franchise registration application.

Renewal Conditions

To renew, Margaritaville Hotels & Resorts franchisees are entitled to an automatic renewal for one additional 10-year term if they meet specific conditions. These include providing written notice of intent to renew between 12 and 18 months before the initial term expires, having fully performed all obligations under the agreement, satisfied all monetary obligations to the franchisor and its affiliates, and not being in default of any agreements. Franchisees must not have received more than two notices of default during the initial term and must meet the franchisor's then-current standards for new franchisees, which cover aspects like creditworthiness and criminal history. They must still own the site or have the right to operate there for the renewal term, and agree to remodel the hotel to the franchisor's current brand image and technological standards within six months of the initial term's expiration. Additionally, franchisees must have attended all mandatory annual conventions, sign the then-current form of franchise agreement (which may have materially different terms and fees, but no new application fee), pay a $50,000 renewal fee, and execute a general release of claims against the franchisor. They must also comply with requests for information to evaluate their ability to perform obligations during the renewal term.

Staffing Notes

Margaritaville Hotels & Resorts requires the franchisee or its approved management company to be solely responsible for hiring all hotel personnel and setting their employment terms. Key Personnel, including the General Manager, food and beverage manager, and sales director, must be hired and properly trained, completing initial training programs to the franchisor's satisfaction. These Key Personnel are expected to dedicate all their working time to supervising the hotel's daily operations and cannot hold concurrent positions at other lodging facilities. If Key Personnel positions change, replacements must attend and successfully complete the required training within 90 days. The franchisor may also mandate Key Personnel and other staff to participate in regional and national meetings or additional training programs.