What is the definition of 'Point of Closing Royalty Payments' for Epcon Communities?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
ity and/or require other additional security. Upon the closing of its financing with its lender or within fifteen (15) days of Franchisor's submittal of an invoice to Franchisee, Franchisee shall reimburse Franchisor for all costs, expenses and fees (including, without limitation, legal fees and filing and recording fees) incurred in obtaining Franchisor's mortgage, or other security.
- (d) Point of Closing Royalty Payments: Franchisee shall pay to Franchisor the following payments, under this Franchise Agreement:
- (i) Point of Closing Royalty Payments: Contemporaneously with the closing of the sale of each Unit in the Project, Franchisee shall remit (or have the escrow agent, attorney, or any other person conducting closings remit) a payment to Franchisor in an amount equal to the percentage determined from consulting the Point of Closing Royalty Percentage Table below (the "Applicable Percentage") multiplied by the Gross Sales Price of such Unit as provided in the applicable Settlement Statement or the total of the "Sale Price of the Property" and the "Sale Price of any personal property included in sale" in the Settlement Disclosure Form, or such lower amount, if applicable as provided in Section 5.2(d)(ii) (the "Point of Closing Royalty Payment"). However, in no event shall the Point of Closing Royalty Payment for each Unit be less than Three Thousand Dollars ($3,000.00), including instances in which there is a Volume-Based Reduction to Point of Closing Royalty Payments or Cap on Calculation of Point of Closing Royalty Payments, as described in subsection (ii) and (iii) below. No later than two days prior to a Unit's closing,
a Settlement Statement or Settlement Disclosure Form, reflecting the applicable Point of Closing Royalty Payment for such Unit, shall be provided to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, Point of Closing Royalty Payments are defined as payments the franchisee makes to Epcon Communities upon the closing of the sale of each unit in a project. These payments are calculated by multiplying a percentage, found in the Point of Closing Royalty Percentage Table, by the gross sales price of the unit as stated in the Settlement Statement or the total of the "Sale Price of the Property" and the "Sale Price of any personal property included in sale" in the Settlement Disclosure Form. The specific percentage used depends on factors outlined in the royalty percentage table.
Epcon Communities requires franchisees to remit these payments contemporaneously with the closing of each unit sale. This means the payment must be made at the same time the sale is finalized. The franchisee can either directly remit the payment or arrange for the escrow agent, attorney, or any other party handling the closing to remit the payment on their behalf. Franchisees must also notify the escrow agent, attorney, or any other person conducting closings for Units in the Project of Franchisee's obligation to pay Point of Closing Royalty payments to Franchisor.
Franchisees must provide Epcon Communities with a Settlement Statement or Settlement Disclosure Form reflecting the applicable Point of Closing Royalty Payment for each unit no later than two days prior to the unit's closing. Upon receiving the Point of Closing Royalty Payment, Epcon Communities will, at the franchisee's request and expense, provide a partial mortgage release or partial security interest release, which releases Epcon Communities' lien against the specific unit. However, the Point of Closing Royalty Payment for each unit shall not be less than $3,000, even with a Volume-Based Reduction or Cap on Calculation of Point of Closing Royalty Payments.