What does an Epcon Communities debtor represent and warrant regarding ownership of the collateral?

According to the 2025 Epcon Communities Franchise Disclosure Document, a debtor provides specific representations and warranties to the secured party regarding the collateral. The debtor asserts that they are the owner of the collateral, and it is free from any mortgages, pledges, liens, or other encumbrances. The only exceptions to this are the security interest created by the agreement itself, other liens permitted by the franchise documents, and any items listed on Schedule 1 of the agreement.

This means that when an Epcon Communities franchisee enters into an agreement where they are the debtor and Epcon Communities is the secured party, the franchisee is guaranteeing that they have clear and unencumbered ownership of the assets being used as collateral. This is a standard practice in secured lending, as it protects the lender's interest in the collateral. If the franchisee defaults on their obligations, Epcon Communities has the right to seize the collateral.

It is important for a prospective Epcon Communities franchisee to carefully review Schedule 1 and understand any existing liens or encumbrances on the collateral. Failure to disclose such information could result in a breach of the agreement and potential legal consequences. Additionally, the franchisee must ensure they operate their business in compliance with all applicable federal, state, and local statutes and ordinances, as this is also part of the representations and warranties made to Epcon Communities.