How might Epcon Communities collect the Minimum Monthly Royalty payment from a franchisee?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
the first sale of a Unit in your project. We may withdraw the Minimum Monthly Royalty from your bank account by electronic funds transfer ("EFT") or require you to pay the Minimum Monthly Royalty to us in some other manner. The amount of the Minimum Monthly Royalty is $2,000 for any month in which you did not close on the sale of a Unit in the preceding month.
At the end of each calendar year during the term of your Franchise Agreement, we will review the Minimum Monthly Royalty payments and Point of Closing Royalty Payments made by you in that calendar year. If you have paid us more than $24,000 in Point of Closing Royalty Payments in that calendar year, and you are not in default under your agreements with us, we will refund to you any Minimum Monthly Royalty payments paid by you in that calendar year. If you violate the terms of your Franchise Agreement relating to transfer of your franchise or ownership interest of your business entity, you will not be eligible for any r
Source: Item 6 — OTHER FEES (FDD pages 16–22)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the company may collect the Minimum Monthly Royalty payment from franchisees through electronic funds transfer (EFT) from the franchisee's bank account, or through some other manner as required by Epcon Communities.
The Minimum Monthly Royalty is required each month that a franchisee's project is under development. A project is considered under development from the date the Minimum Monthly Royalty is required until the project is completed, or the franchisee's right to use the Development System is terminated. The franchisee must pay the Minimum Monthly Royalty on the 15th day of each month, starting from the earlier of (a) the 37th month after the Franchise Agreement is signed, or (b) the month immediately after the first Unit sale in the project closes. The Minimum Monthly Royalty is $2,000 for any month in which the franchisee did not close on the sale of a Unit in the preceding month.
Epcon Communities will review the Minimum Monthly Royalty and Point of Closing Royalty Payments at the end of each calendar year. If a franchisee has paid more than $24,000 in Point of Closing Royalty Payments during the year and is not in default, Epcon Communities will refund any Minimum Monthly Royalty payments made during that year. However, if a franchisee violates the terms of the Franchise Agreement relating to the transfer of the franchise or ownership interest, they will not be eligible for a refund of Minimum Monthly Royalty payments. This refund mechanism incentivizes franchisees to actively sell units and maintain compliance with the franchise agreement.