Does the agreement specify any geographic limitations on the restrictions placed on the undersigned after termination or expiration of the Epcon Communities Franchise Agreement?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two (2) years following the effective date of termination or expiration of this Agreement, whether by lapse of time, sale and/or assignment of the Epcon Communities franchise granted hereunder, or other cause, Franchisee shall not, directly or indirectly, either as a principal, agent, employee, officer, director or member of any corporation or other business entity, as a partner or sole proprietor, or in any other way engage in the ownership, development or construction of any real estate development project that is age restricted or for which the targeted buyers are the 55+ home buyer and includes, but is not limited to, detached and/or attached ranch-style homes (with or without basements or a second floor) that are similar to the homes and communities depicted in Franchisor's Development System, within (a) ten (10) miles of the geographic border of any "Initial Market Area" granted to any franchisee pursuant to any Initial Market Area Agreement, or any other agreement that is effective between such franchisee and Franchisor, (b) ten (10) miles of the geographic border of any "Market Area" granted to any franchisee pursuant to any Market Area Agreement, or any other agreement that is effective between such franchisee and Franchisor, (c) ten (10) miles of the geographic border of any "Reserved Market Area" reserved for any franchisee or prospective franchisee under any Market Hold Agreement or other agreement that is in effect between such party and Franchisor, or, (d) ten (10) miles of any real estate development project of Epcon Communities, LLC or of any business entity affiliated with Epcon Communities, LLC.
For purposes of this Section 13.7, the term "Franchisee" shall include any officer, director, shareholder, member or holder of an ownership interest in Franchisee, if Franchisee is a corporation, limited liability company or other business entity, and any partner of Franchisee, if Franchisee is a partnership.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, there are geographic limitations placed on the franchisee after the termination or expiration of the franchise agreement. Specifically, for two years after the agreement ends, the franchisee (or its officers, directors, shareholders, members, or partners) cannot engage in the ownership, development, or construction of age-restricted real estate projects targeting the 55+ home buyer that are similar to Epcon Communities' projects.
The geographic limitation extends to within ten miles of several defined areas. These areas include the geographic border of any "Initial Market Area" granted to any franchisee, the geographic border of any "Market Area" granted to any franchisee, the geographic border of any "Reserved Market Area" reserved for any franchisee or prospective franchisee, and ten miles of any real estate development project of Epcon Communities, LLC or its affiliates.
This restriction aims to prevent former franchisees from directly competing with Epcon Communities or its other franchisees in close proximity to existing or planned developments. This non-compete clause is a standard practice in franchising to protect the brand's market share and the investment of its franchisees. A prospective franchisee should carefully consider these restrictions and their potential impact on future business opportunities after leaving the Epcon Communities system.