What is the estimated range for Direct and Indirect/Overhead Project Costs for an Epcon Communities project?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Direct and indirect/overhead project costs typically include expenses such as permits, final site engineering and approvals, permits, final architectural working drawings derived from our prototypes, attorney fees, salaries of the job-site superintendent or a construction manager and direct labor.
Direct and indirect/overhead project costs also include the creation of the homeowners or condominium association, creation of condominium documents including: the required services of architects and engineers; engagement of a property management contractor; general administrative project costs; insurance; accounting services; real estate taxes; and any required funding of the association at start-up or during the development of your project.
Direct and indirect/overhead project costs also include a general contingency amount, which varies for each project and is used to cover costs in a project which may not be expected. In developing companyowned projects, Epcon, Epcon Carolinas, Epcon Indiana and Epcon Tennessee use an amount equal to approximately one percent (1%) of the total costs of the project for its general contingency amount and an inflation rate of five percent (5%) per year for multi-year projects that do not have trade partner price guarantees that cover the entire development period.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 22–32)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, direct and indirect/overhead project costs encompass a variety of expenses. These typically include permits, final site engineering and approvals, final architectural working drawings derived from Epcon's prototypes, attorney fees, salaries for the job-site superintendent or a construction manager, and direct labor. These costs also cover the creation of homeowners or condominium associations and related documents, requiring the services of architects and engineers.
Further, these costs extend to engaging a property management contractor, covering general administrative project costs, insurance, accounting services, real estate taxes, and any required funding of the association at start-up or during the project's development. Epcon Communities also includes a general contingency amount to cover unexpected project costs. For company-owned projects, Epcon, Epcon Carolinas, Epcon Indiana, and Epcon Tennessee use approximately one percent (1%) of the total project costs for this contingency. They also factor in an inflation rate of five percent (5%) per year for multi-year projects without guaranteed trade partner prices covering the entire development period.
Prospective franchisees should note that these direct and indirect/overhead project costs are crucial for budgeting and financial planning. Understanding these costs helps in anticipating potential financial obligations and managing project expenses effectively. The inclusion of a contingency amount and consideration for inflation in multi-year projects highlights the importance of accounting for unforeseen expenses and economic factors that could impact the overall project cost. However, the FDD excerpt does not provide a specific estimated range for these costs. Therefore, it is essential for potential franchisees to conduct thorough due diligence and consult with Epcon Communities to obtain detailed cost projections tailored to their specific project and location.