For an Epcon Communities franchise, is the franchisee obligated to personally participate in the development and construction of their project?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
You are not obligated to participate personally in the development and construction of your project, however, we recommend that you or at least one of the owners of the franchise business entity directly participate in the development and construction of your project.
If you form a business entity to own and operate your franchised business, your principals, officers, owners, directors, investors and/or partners must each sign the Personal Covenants and Agreement document attached as Exhibit E to this disclosure document. If your spouse is a principal, officer, owner, director, investor or partner in your business entity, your spouse must also sign the Personal Covenants and Agreement document. Signing this document obligates the party signing to be personally bound by the payment and other obligations of the Franchise Agreement, including those concerning confidentiality and non-disclosure, completion of project(s), and non-competition.
If you form a business entity to own and operate your franchised business, the principal owners of the business entity must personally guarantee the obligations of the business entity under the Franchise Agreement.
If requested by us, your project must at all times be under the direct supervision of a Director of Operations who must devote his or her full time and energy to the development of your project. We must approve the person you propose to serve as your Director of Operations.
There are no limitations on whom you can hire as an on-premises supervisor of your project. Your on-premises supervisor is not required to own an equity interest in the franchisee entity, if the franchisee is a business entity.
You must require your managers and employees who are provided detailed knowledge of the Development System to sign the Personal Covenants and Agreement document attached as Exhibit F to this disclosure document. Signing this document obligates the party signing to be personally bound by the obligations of the Franchise Agreement concerning confidentiality and non-disclosure and non-competition.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 54–55)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, franchisees are not required to personally participate in the development and construction of their project. However, Epcon Communities recommends that the franchisee, or at least one of the owners of the franchise business entity, directly participate in the development and construction.
If the franchisee forms a business entity to own and operate the franchised business, the principals, officers, owners, directors, investors, and/or partners must sign the Personal Covenants and Agreement document. If the franchisee's spouse is a principal, officer, owner, director, investor, or partner in the business entity, the spouse must also sign this document. By signing, the party agrees to be personally bound by the payment and other obligations of the Franchise Agreement, including those concerning confidentiality and non-disclosure, completion of project(s), and non-competition.
Epcon Communities may request that the project be under the direct supervision of a Director of Operations, who must devote their full time and energy to the project's development. Epcon Communities must approve the person serving as the Director of Operations. The franchisee can hire anyone as an on-premises supervisor, and this supervisor is not required to own an equity interest in the franchisee entity if the franchisee is a business entity. Managers and employees with detailed knowledge of the Development System must also sign the Personal Covenants and Agreement, obligating them to the confidentiality, non-disclosure, and non-competition terms of the Franchise Agreement.