Compass by Margaritaville Franchise Cost, Revenue & Review 2026
Data from FDD filing
Analysis by FranchiseVerdict Research · Methodology
Compass by Margaritaville is a lifestyle hotel franchise offering laid-back, coastal-themed properties under the Margaritaville brand. Franchisees own and operate the hotels, managing guest services, amenities, and revenue.
FranchiseVerdict summary · 2026
A Compass by Margaritaville franchise requires a total initial investment of $10.2M – $37.4M and an ongoing 5.0% royalty[2]. The 2024 FDD does not disclose unit-level revenue (no Item 19). FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2024 FDD issuance
Overview
- Investment
- $10.2M – $37.4M
- 43rd pct Lodging
- Avg gross sales
- N/A
- 2 outlets
- Royalty
- 5.0%
- 3rd pct Lodging
- Units
- 2
- 12th pct Lodging
- SBA charge-off
- N/A
Quick verdict · Lodging · color = vs category peers
Green = favorable by >10% vs Lodging avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $10.2M – $37.4M, 5.0% ongoing royalty.
- RETURNSAudited consolidated statements of Margaritaville Holdings LLC (parent), Ernst & Young LLP, years ended Dec 31, 2023 and 2022. Total partners' deficit (negative net worth) of $(101,014,475) at Dec 31, 2023. Revenue comprises restaurant/retail sales plus restaurant, resort, residential/timeshare, and consumer products royalties.
- RISKVerdict C (Average), verdict score 41/100 (higher is better).
- DATANo Item 19 financial performance representation. Without franchisor-disclosed revenue data, you'll need to gather unit economics directly from existing franchisees.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- Compass Margaritaville, L.L.C.
- Parent company
- Margaritaville Enterprises, LLC
- Ultimate parent
- Margaritaville Holdings LLC
- CEO title
- Chief Executive Officer
- John Cohlan
- Incorporated in
- DE
- HQ
- 6900 Turkey Lake Road, Suite 200, Orlando, Florida 32819
- Auditor
- Ernst & Young LLP
- Audited financials
- Franchisor revenue
- $92.5M
- vs $74.9M prior year
Independent franchisee associations
- Franchise Advisory Council (FAC)
Franchisee-led councils or alliances disclosed in Item 20. Indicates operator voice.
Overview
About
- CEO
- John Cohlan
- Headquarters
- FL
- Founded
- 2018
- FDD year
- 2024
- States available
- 2
Can you afford it, and what does the money buy?
Entry cost runs 142% above the typical lodging franchise.
Source: FDD 2024 · Items 5–7
Full Item 7 breakdown23 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Application Feenot refundable | $65K | $65K | |
| PIP fee (Property Improvement Plan)not refundable | $0 | $5K | |
| TIP fee (Technology Improvement Plan)not refundable | $0 | $10K | |
| Professional services fees (architect, design, market study, engineering)not refundable | $450K | $700K | |
| Insurance and Permits, licenses, deposits, and related feesnot refundable | $50K | $150K | |
| Training fees and expenses vendor and brand trainingnot refundable | $35K | $150K | |
| Construction, improvements, remodeling, and decorating costsnot refundable | $5.0M | $30.0M | |
| Technologynot refundable | $550K | $830K | |
| Website Set-Upnot refundable | $12K | $30K | |
| CRS Set Upnot refundable | $5K | $5K | |
| CRM Set-Upnot refundable | $13K | $13K | |
| Loyalty Program Set-Upnot refundable | $5K | $5K | |
| Furniture, fixtures, other fixed assets, and equipment (FF&E)not refundable | $1.8M | $2.1M | |
| Operational Supplies and Equipment (OSE)not refundable | $500K | $1.0M | |
| Exterior signsnot refundable | $200K | $250K | |
| Financial, tax, and legal costsnot refundable | $600K | $750K | |
| Pre-opening Sales and Marketingnot refundable | $150K | $250K | |
| Photography and Videographynot refundable | $40K | $125K | |
| Medallia Set-Upnot refundable | $3K | $3K | |
| Financial Reporting System Set-Upnot refundable | $10K | $16K | |
| Total initial investment | $10.2M | $37.4M |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $10.2M – $37.4M
- Middle of category vs category
- Liquid capital req'd
- $300K – $500K
- Top 40% of category vs category
- Franchise fee
- N/A
- Paid to franchisor at signing
- Royalty
- 5.0%
- percentage · typical 6–8%
- Ad fund
- 1.5%
- typical 3–5%
- Total fee load
- 6.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 5.0% of gross sales |
| Marketing / ad fund | 1.5% of gross sales |
| Training fee | $150K |
| Renewal fee | $30K |
| Inventory (initial) | $500K – $1.0M |
| Total fee load | 6.5% of rev |
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
Compass by Margaritaville did not disclose financial performance in FDD Item 19. The ROIC and return models require Item 19 revenue. Without it all inputs are estimates. You can still run the calculator with your own assumptions by entering an expected revenue figure.
Returns model · single-unit ROIC
What would one Compass by Margaritaville unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
0%
Below the 30–60% attractive-franchise band
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2024 FDD
Financial Performance
Audited consolidated statements of Margaritaville Holdings LLC (parent), Ernst & Young LLP, years ended Dec 31, 2023 and 2022. Total partners' deficit (negative net worth) of $(101,014,475) at Dec 31, 2023. Revenue comprises restaurant/retail sales plus restaurant, resort, residential/timeshare, and consumer products royalties.
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Fee burden
Total ongoing fee load of 6.5% — below the Lodging average of 10.4%.
Disclosure
Franchisor chose not to disclose financial performance representations. You will need to gather unit economics directly from existing franchisees.
Operator retention
Net unit growth of +100.0% over 3 years (1 opened, 0 closed).
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Lodging averages
How Compass by Margaritaville Compares
Is the system healthy?
Source: FDD 2024 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 2
- Opened
- 1
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +100.0%
- Net unit change over 3 years
- 3-yr CAGR
- +100.0%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 1
- Closed (3yr)
- 0
- Terminated (3yr)
- 0
- Non-renewed (3yr)
- 0
- Transfers (3yr)
- 0
- Reacquired (3yr)
- 0
- Franchisor bought back
- Projected new
- 2
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 2 states reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
2
states with franchisees (per FDD Item 12)
Fast growth in a small system. Newer franchisors expanding quickly may not yet have the support infrastructure of larger systems.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
What could kill this investment?
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
A capital-intensive resort/hospitality franchise with only 2 units, undisclosed financials, multiple legal disputes, regulatory compliance failures, and no territory protection represents extreme execution risk with questionable franchisor financial stability.
Litigation (Item 3)
Three matters: (1) Boss Investments Ltd. v. Margaritaville entities — trademark sub-license dispute, settled January 2021 with corporate defendants paying 50% of future food/beverage royalties from Bahamian Hotel; (2) Shultz et al. v. Margaritaville Enterprises et al. — cottage owner tort claims, dismissed with prejudice April 2023, mutual walk-away; (3) California DFPI consent order against Margaritaville Hotels & Resorts for failure to file exemption notices for three California franchise sales, resolved March 2020 with $7,500 penalty.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · Ernst & Young LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: No
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 41 / 100 verdict
- 01MINOROnly 2 operating units with unknown growth trajectory suggests failed or stalled system expansion
- 02HIGHGoing Concern = False indicates potential financial viability questions at franchisor level
- 03HIGHMultiple litigation cases including trademark disputes, deceptive practices lawsuits, and regulatory compliance failures (California administrative consent order 2020)
- 04MINORNo protected territory means franchisees face direct competition from other Compass locations
- 05MINORMargaritaville brand association carries reputational risk given parent company's past financial troubles and casual dining market headwinds
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 6.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2024 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 20 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 9 |
| Mandatory arbitration | Yes |
| Arbitration location | Atlanta, Georgia |
| Jury trial waiver | Yes |
| Governing law | DE |
| Litigation count | 3 |
View Item 3 litigation summary
Three matters: (1) Boss Investments Ltd. v. Margaritaville entities — trademark sub-license dispute, settled January 2021 with corporate defendants paying 50% of future food/beverage royalties from Bahamian Hotel; (2) Shultz et al. v. Margaritaville Enterprises et al. — cottage owner tort claims, dismissed with prejudice April 2023, mutual walk-away; (3) California DFPI consent order against Margaritaville Hotels & Resorts for failure to file exemption notices for three California franchise sales, resolved March 2020 with $7,500 penalty.
Items 10, 11
Training & Operations
- Classroom training
- 7 hrs
- On-the-job training
- 33 hrs
- Training location
- Franchisor-selected Margaritaville-branded venue (offsite), plus on-site task force training pre-opening
- Ongoing training
- Required
- Time to open
- 18 mo
- From signing to launch
- Site selection
- Franchisee selects; franchisor approves
- Franchisor financing
- Not offered
- Item 10
- POS system
- InfoGenesis
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: InfoGenesis
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Compass by Margaritaville franchise?
The total investment to open a Compass by Margaritaville franchise ranges from $10.2M – $37.4M. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Compass by Margaritaville franchise owners earn?
Compass by Margaritaville does not disclose average franchise owner earnings in their FDD Item 19. Not all franchisors are required to make financial performance representations. We recommend asking existing franchisees directly about their financial experience.
What is Item 19 in the Compass by Margaritaville FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Compass by Margaritaville FDD and qualifies whose outlets they describe.
What is Compass by Margaritaville's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Compass by Margaritaville (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Compass by Margaritaville franchise locations are there?
As of their most recent FDD filing, Compass by Margaritaville has 2 total units in the United States, including 2 franchised units and 0 company-owned units. 1 new units were opened in the latest reporting year.
Is Compass by Margaritaville a good franchise to buy?
FranchiseVerdict rates Compass by Margaritaville as a C-grade franchise with a verdict score of 41 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
For franchisors
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.