Besides the designated suppliers, is an Epcon Communities franchisee required to purchase any items or services from suppliers designated or approved by Epcon Communities?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
nor our affiliates received revenue or other material consideration from required purchases of products or services by franchisees.
Other than purchases from the designated suppliers discussed above, you are not required to purchase any items or services from suppliers designated or approved by us.
ITEM 9. FRANCHISEE'S OBLIGATIONS
This table lists your principal obligations under the franchise and other agreements. It will help you find more detailed information about your obligations in these agreements and in other items of this disclosure document.
Franchise Agreement, Other Agreements and Addenda
| Obligation | Article(s)/Section(s)/ Paragraph(s) in Agreement or Addendum | Disclosur
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–35)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, franchisees are generally not required to purchase items or services from designated or approved suppliers, other than those specifically designated. The FDD specifies that required purchases from designated, approved, or specification-meeting suppliers will constitute 57% to 64% of the initial costs to establish the franchised business. Furthermore, these purchases will account for 81% to 83% of total operating expenses thereafter, assuming a 30-unit project. Epcon Communities does not receive revenue or other material consideration from required franchisee purchases.
However, Epcon Communities franchisees are required to secure a home warranty from a designated third-party provider for each unit sold, covering workmanship defects for one year and structural defects for ten years. The cost of this warranty ranges from $925 to $1,500 per unit, with a potential one-time enrollment fee of $95 per project. Additionally, franchisees must engage a civil engineer or land planner to create a conceptual site plan, estimated to cost between $4,000 and $4,750 for a 12 to 25-acre site.
Epcon Communities franchisees must also maintain specific insurance coverage, including builder's risk and general liability insurance of at least $1,000,000 per occurrence and $2,000,000 per project annually. The insurance policy must cover liability arising from project development, premises-operations, independent contractors, and products-completed operations, without restrictive endorsements. The policy must name the franchisee and all project entities as named insureds, and Epcon Communities Franchising, LLC as an additional insured. All insurance must be placed with a carrier having an A.M. Best's rating of "A-" and a Class rating of "x" or better, duly licensed in the project's state, or approved in writing by Epcon Communities.