What is the formula for calculating the Point of Closing Royalty Payment 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").
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the Point of Closing Royalty Payment is calculated by multiplying the Applicable Percentage by the Gross Sales Price of the Unit. The Applicable Percentage is determined by consulting the Point of Closing Royalty Percentage Table. The Gross Sales Price is found on the Settlement Statement or the Settlement Disclosure Form, and includes the Sale Price of the Property and the Sale Price of any personal property included in the sale.
Epcon Communities may, at its discretion, limit the Gross Sales Price used to calculate the Point of Closing Royalty Payment. This means that even if a franchisee sells a unit for a higher price, the royalty payment could be based on a lower, capped amount. Additionally, Epcon Communities may limit the total amount of Point of Closing Royalty Payments a franchisee makes in a calendar year.
However, the Point of Closing Royalty Payment for each unit will not be less than $3,000, even if there is a Volume-Based Reduction or a Cap on Calculation of Point of Closing Royalty Payments. Franchisees must provide Epcon Communities with a Settlement Statement or Settlement Disclosure Form reflecting the Point of Closing Royalty Payment no later than two days prior to the unit's closing. Franchisees are also obligated to 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.