Does the Epcon Communities agreement specify any financial penalties associated with any of the default conditions?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
gnment Agreement; provided and conditioned, however, upon fulfillment by both | | | Assignor and Assignee, of the following conditions: | | | | |
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- Epcon Communities' duties and obligations pursuant to the terms of the Franchise Agreement and Market Area Agreement or Small Market Area Agreement, as applicable, are not altered or otherwise increased.
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- Epcon Communities shall be paid any and all payments specified in the Franchise Agreement no later than the applicable payment due dates.
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- Assignor fully complies with the terms of the Franchise Agreement, Market Area Agreement or Small Market Area Agreement, as applicable, and any and all other agreements between Epcon Communities and Assignor. Notwithstanding the foregoing, if Assignor is not in full compliance with the terms of each such agreement(s) but either of the following occur Epcon Communities shall consent to the assignment: (i) if Assignor's noncompliance is due to nonpayment of amounts due to Epcon Communities related to the subject Project, Assignee shall pay any fees related to such Project that are past due and payable to Epcon Communities and shall agree to pay any fees related to such Project that become due and payable to Epcon Communities in the future, or (ii) if Assignor's non-compliance is due to a material default in Assignor's use of the Development System in the construction of the Project, Assignee agrees to correct such material defaults and use the entire Development System without modification or deviation.
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- Assignee fully complies with the terms of the Franchise Agreement and Market Area Agreement or Small Market Area Agreement, as applicable, including without limitation, upon its decision to use the Development System to complete a Project or Projects, providing to Epcon Communities copies of the documents attached as Exhibit "2" and/or Exhibit "2A" to the Franchise Agreement executed by those individuals who will be acting on behalf of Assignee in completing any Project(s) and will be provided more detailed information regarding the Development System than has been provided to the general public.
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- In the event that Epcon Communities must hold initial training sessions for the benefit of Assignee, or Assignee's agents and employees, Assignee agrees to pay to Epcon Communities a reasonable tuition fee for each attendee attending such training.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, the agreement specifies certain financial obligations and repercussions related to defaults. Specifically, if an Assignor (original franchisee) is not in full compliance with their agreements due to nonpayment of amounts owed to Epcon Communities for a project, the Assignee (new franchisee) must pay any past due fees related to that project to Epcon Communities to proceed with the assignment. The Assignee must also agree to pay any future fees related to the project. This ensures Epcon Communities receives all outstanding payments before a project changes hands.
Additionally, the franchisee agrees to indemnify Epcon Communities from any liabilities, costs, and expenses, including reasonable attorney's fees, related to or arising from a breach of specific sections (11 and/or 12) of the agreement. This means that if the franchisee violates these sections, they are responsible for covering Epcon Communities' legal costs and any other associated expenses.
Furthermore, if a franchisee's access to the Epcon Communities Intranet is terminated due to failure to maintain authorized franchisee status or other reasons, they must immediately cease accessing the Intranet, including the website and databases. While this isn't a direct financial penalty, losing access to these resources could significantly impact the franchisee's ability to operate effectively. Also, Epcon Communities may require the Assignee to pay a reasonable tuition fee for initial training sessions held for the benefit of the Assignee, or Assignee's agents and employees.
Finally, if the Franchisee under the Prior Franchise Agreement is in default of the Prior Franchise Agreement as of the Effective Date of this Agreement, Epcon Communities may elect to require Franchisee to pay the Initial Marketing Program Membership Fee.