COMPASS BY MARGARITAVILLE

Item 7 lays out the entry: a flat $65,000 franchise fee grants access to the Hotel System, including trademarks, ops manuals, and tech like CRM and upsell software. Ongoing bites include 5% royalty on gross rooms revenue, 1.5% brand/ad fund (capped at 3% of GRR), and hefty fixed fees of $6,851-$7,518 monthly for a typical 130-room property—covering loyalty programs, national sales, website maintenance, Medallia reviews, and more. No Item 19 means zero disclosed earnings from existing units, forcing buyers to guess at profitability based on market comps rather than hard franchisor data; in hotels, where occupancy swings wildly, this opacity amplifies risk for select-service plays.

Since 2018, Margaritaville Enterprises has built to just 4 locations (Orlando HQ), exploding +100% from 2 in 2023 to 4 in 2024 per Item 20 trends, with 16 new units eyed amid zero terminations or transfers noted. Amenities like free breakfast, pools, fitness, and optional on-site bars target corporate and leisure travelers in primary/secondary markets. Buyers must probe fixed fee scalability for smaller builds, local demand via STR reports, and parent support depth before betting on this 6.5% total fee drag in a maturing brand.