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D72/100FDD 2024

Camp Margaritaville® — Litigation & Risk

Lodging - Hotels & Motels · FDD Items 3, 4 & 5

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Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
72 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Delaware
State whose law governs disputes — relevant if you're not based there

What drove the 72/100 rating

Risk Score Breakdown

  1. 01HIGHGoing concern status is FALSE — indicates potential financial instability or viability concerns at corporate level
  2. 02MEDNo average revenue or net income disclosed — impossible to validate ROI; suggests weak unit economics or reluctance to disclose underperformance
  3. 03HIGHMultiple active litigation matters including trademark disputes, property/tort claims, and regulatory violations — indicates operational and legal governance issues
  4. 04MINOROnly 5 total units with 25% YoY growth insufficient to validate system stability — extremely small franchise base makes failure catastrophic
  5. 05MINORTerritory is unprotected — franchisees face direct competition from other company franchisees with no geographic exclusivity
  6. 06MEDHigh initial investment ($4.5M+) combined with undisclosed returns creates acute financial risk exposure
  7. 07MINORRegulatory filing violations in California demonstrate compliance failures at franchisor level

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.