What bankruptcy-related events could lead to the termination of the license agreement between Epcon Communities and IP86?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, the agreement may be terminated if: (1) we fail to pay royalty payments under the license agreement when they are due; (2) any of the following relating to bankruptcy occur: (i) we make an assignment for the benefit of creditors or enter into an arrangement with our creditors, (ii) a receiver, custodian, trustee or liquidator is appointed for us or for a material part of our properties, or proceedings are commenced seeking appointment of a receiver, custodian, trustee or liquidator and is not dismissed within 60 days, (iii) a voluntary bankruptcy petition is filed by us or on our behalf, (iv) we suffer an order for relief under federal bankruptcy law or apply for, consent to or authorize an application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, liquidation or other similar law, or proceedings are commenced seeking an application and is not dismissed within sixty (60) days, (v) a material part of our properties are attached or subjected to a lien, which is not removed within sixty (60) days, (vi) we do not pay our debts as they become due, (vii) we conceal or remove a material part of our assets, with an intent to hinder or delay our creditors, or (viii) we transfer a material part of our property for the benefit of a creditor at a time when other similar creditors have not been paid, or (3) we fail to cure a default under the license agreement. Termination of the license agreement with IP86 will not materially alter your rights to use the trademarks.
Source: Item 13 — TRADEMARKS (FDD pages 50–53)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the license agreement between Epcon Communities and IP86 can be terminated if certain bankruptcy-related events occur. These events include: Epcon Communities making an assignment for the benefit of creditors or entering into an arrangement with its creditors; the appointment of a receiver, custodian, trustee, or liquidator for Epcon Communities or a material part of its properties, or the commencement of proceedings seeking such an appointment that is not dismissed within 60 days; Epcon Communities filing a voluntary bankruptcy petition or suffering an order for relief under federal bankruptcy law.
Further conditions that could trigger termination involve Epcon Communities applying for, consenting to, or authorizing an application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, liquidation, or other similar law, or the commencement of proceedings seeking such an application that is not dismissed within sixty (60) days. Additionally, the agreement may be terminated if a material part of Epcon Communities' properties are attached or subjected to a lien, which is not removed within sixty (60) days; Epcon Communities does not pay its debts as they become due; Epcon Communities conceals or removes a material part of its assets with the intent to hinder or delay its creditors; or Epcon Communities transfers a material part of its property for the benefit of a creditor at a time when other similar creditors have not been paid.
It is important to note that the termination of the license agreement with IP86 will not materially alter a franchisee's rights to use the trademarks. This provides some assurance to franchisees that their ability to operate under the Epcon Communities brand will not be significantly impacted if the license agreement between Epcon Communities and IP86 is terminated due to bankruptcy-related events.