FDD Items 3 & 4 · 2025 filing
Margaritaville Hotels & Resorts litigation history
What Margaritaville Hotels & Resorts disclosed about lawsuits, arbitrations and bankruptcy in the 2025 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.
Items 3 & 4 at a glance
What the filing discloses
- Cases disclosed
- 3
- Item 3, as counted in the filing
- Largest disclosed settlement
- $8K
- As stated in Item 3
- Bankruptcy (Item 4)
- None
- Franchisor, parent, predecessor or officer
- Filing year
- 2025
- Disclosures cover the prior ten years
Extracted from the 2025 Franchise Disclosure Document
Item 3: litigation
1) Boss Investments Ltd. v. Margaritaville of Bahamas et al. - trademark sub-license dispute, settled 2020 with dismissal with prejudice and royalty sharing agreement. 2) Shultz et al. v. Margaritaville Enterprises et al. - cottage owner fraud/tort claims, settled 2023 with mutual walk-away. 3) California Commissioner of Financial Protection v. Margaritaville Hotels & Resorts, LLC - failure to file exemption notices for 3 CA franchise sales, resolved by 2020 consent order with $7,500 penalty.
Disclosure signals that moved the score
How this shows up in the verdict
- Multiple litigation events including trademark disputes, conspiracy lawsuits, and regulatory violations indicate operational and legal instability
- Going Concern status is False, creating questions about franchisor financial viability and long-term support
The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.
Before you weigh a lawsuit
How to read Item 3
A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.
Questions worth asking current and former franchisees, using the contact list in Item 20:
- Were you, or anyone you know in the system, party to a dispute with the franchisor?
- Was it resolved by settlement, arbitration or a court, and on what terms?
- Has the number of disputes gone up or down since you signed?