The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Margaritaville's Bahamian franchisee yesterday suffered a major reversal in its bid to block the brand's $250m tie-up with The Pointe when a US judge dismissed its lawsuit.

Judge William Dimitrouleas, sitting in the south Florida federal court, ruled that Boss Investments, owner of the Margaritaville-flagged restaurant on Paradise Island, had failed to prove the court had jurisdiction over defendants that included several of the brand's US companies.

He ordered that any imminent legal filings and motions be "denied as moot", dealing a significant blow to Boss Investments and its principals, Peter Maury and Mike Grandonico, over their claim that Margaritaville's partnership with the downtown Nassau resort violates their exclusive right to use the brand's trademarks and intellectual property within Bahamian territory.

The Bahamian franchisee's lawsuit, filed earlier this month, also alleged that Margaritaville executives deterred it from opening a second restaurant location near Nassau's cruise port to protect their "grander plans" at The Pointe.

Accusing Margaritaville, the lifestyle brand founded by US singer, Jimmy Buffett, of "deceitful" conduct by concealing its partnership with China Construction America (CCA), the Bahamian franchisee expressed fears that the larger, resort-centred location will "obliterate" its current cruise passenger customer base and "destroy" its business.

Mr Maury, who operates the Bay Street Marina located just behind Luciano's Restaurant, and his business partner said their expansion plans had been "completely shattered", with staff morale undermined because "they "now believe their jobs are in jeopardy" due to the competitive threat posed by The Pointe's Margaritaville brand.

Adam Steinberg, Boss Investments' US attorney, in a letter to Margaritaville Bahamas chief executive, John Cohlan, said it had only learned of The Pointe plans when they were released to the media on January 21, 2018.

"The discovery of the aforementioned Margaritaville project was shocking to say the least," Mr Steinberg wrote, pointing to Boss Investments' exclusive sub-licence to use the brand's trademarks within Bahamian territory.

"Indeed, the 'signature Margaritaville food and beverage concepts' at Margaritaville at The Pointe will directly compete with Boss's first venue, a Margaritaville concept located only two miles away from downtown Nassau," he added.

"Moreover, Margaritaville at The Pointe, with the water park and massive amenities, will always win the customer.... and are nearly certain to drive the sub-licensee out of business. [It] has already caused a significant impact on its business due to employee concerns and the likely loss of key employees.....

"We further understand that Margaritaville has discussed the opening of Margaritaville at The Pointe with Boss' employees, and that such discussions are impacting the employees' morale as they now believe that their jobs are in jeopardy due to the fact that Margaritaville at The Pointe will undoubtedly negatively affect Boss' business at [Paradise Island]."

A further exchange of letters resulted in Mr Steinberg writing to the franchisor on February 26, 2018, suggesting that the dispute could have been avoided if Margaritaville had negotiated with Boss Investments to amend the terms of its contract. The latter had agreed to such a change on August 7, 2014, to allow the opening of a Margaritaville-themed restaurant on Great Stirrup Cay, the private island used by Norwegian Cruise Line (NCL).

"Margaritaville owed a good faith obligation and fiduciary duty not to destroy the value of Boss' exclusive licence," Mr Steinberg wrote. "Clearly the resort, with its food, beverage and retail concepts operated under the Jimmy Buffett name, image and likeness (a strikingly similar product) will destroy Boss' venue two miles away.

"Additionally, the construction and development of the resort will usurp the goodwill associated with Boss' exclusive licence, and Boss has invested significant time, energy and money (many millions of dollars) to develop the goodwill associated with its venue."

With plans for a second downtown Nassau restaurant "completely shattered", Mr Steinberg added that Margaritaville's tie-up with The Pointe had come as "a huge shock" to Mr Maury and Mr Grandonico.