What is the consequence if the franchisee is not in full compliance with all obligations in the Franchise Agreement and other agreements with Epcon Communities?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
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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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The undersigned agrees that, in the event he or she breaches any obligation or covenant set forth or referenced herein, Epcon Communities Franchising, LLC and/or Franchisee and/or Sublicensee shall be entitled, without bond, to the entry of temporary and permanent injunctions and orders of specific performance as necessary to prohibit any violation of the terms of this Personal Covenants and Agreement document or any applicable law, ordinance, or regulation, or which is dishonest or misleading to Epcon Communities Franchising, LLC or the general public.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 FDD, if an Epcon Communities franchisee fails to comply with the terms of the Franchise Agreement, Market Area Agreement, or Small Market Area Agreement, Epcon Communities is still obligated to fulfill its duties and obligations as outlined in those agreements. Additionally, the franchisee is still responsible for making all payments to Epcon Communities by the specified due dates.
However, in the context of an assignment of the Franchise Agreement, if the franchisee (Assignor) is not in full compliance, Epcon Communities may still consent to the assignment under certain conditions. Specifically, if the non-compliance is due to non-payment of amounts related to a project, the incoming franchisee (Assignee) must pay any past due fees and agree to pay future fees related to that project. Alternatively, if the non-compliance is due to a material default in the Assignor's use of the Development System in constructing a project, the Assignee must agree to correct those defaults and use the Development System without modification.
Furthermore, if individuals associated with the franchisee, such as investors, breach any obligations related to the Development System, Epcon Communities is entitled to seek injunctions and orders of specific performance to prevent violations of the Personal Covenants and Agreement or any applicable laws. This indicates that Epcon Communities takes breaches of confidentiality and proper use of its Development System seriously and will take legal action to protect its interests.