AHEAD OF TIME (At least 4 hours before serving):Cut the watermelon into slices and cut off the rind. Cut watermelon meat into about 1/2 inch cubes.
Place watermelon cubes into a gallon freezer bag, spread it evenly throughout the bag, and freeze for at least 4 hours. (You may need to use more bags if it’s a large watermelon.)
When you’re ready to make some frozen margaritas, just take out the freezer bag, hit it on the counter a few times to break apart the watermelon, and place as much as you need into the blender.
Add lime zest, lime juice, and tequila to the blender as well and blend until all smooth.
Depending on how much you need to make at a time, cut the recipe in half or thirds to make separate batches of margaritas. You can adjust amount of tequila according to your preference.
Note: watermelon is already pretty sweet so adding a sugar rim will make this cocktail quite sweet. You may choose to add salt to the rim or nothing at all.