When does an Epcon Communities franchisee begin paying for the use of Higharc Services?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchisee acknowledges that Franchisor may, in its sole discretion, suspend, limit or revoke a Franchisee's right to use the Higharc Services if Franchisor determines that Franchisee, its agents, employees or owners, have failed to comply with the requirements and obligations pertaining to the Higharc Services. Notwithstanding any such suspension, limitation or revocation described above, the obligations of Franchisee to pay the Technology Royalty under this Addendum will continue without reduction until such time as all amounts owed by Franchisee to Franchisor under the terms of this Addendum are indefeasibly paid in full.
In consideration for use of the Higharc Services, commencing with the date of execution of this Addendum, 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 One-Thousand Five Hundred No/100 Dollars ($1,500.00) (the "Technology Royalty"). No later than two days prior to a Unit's closing, a Settlement Statement or Settlement Disclosure Form, reflecting the applicable Technology Royalty payment for such Unit, shall be provided to Franchisor.
If, in strict accordance with the terms of the Franchise Agreement, Franchisee requests any change or modification to the Development System in connection
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, a franchisee begins paying for the use of Higharc Services upon the execution of the addendum related to these services. Specifically, the franchisee must remit a Technology Royalty of $1,500.00 to Epcon Communities contemporaneously with the closing of the sale of each unit in the project. This payment is in consideration for the use of Higharc Services.
This means that while the franchisee gains access to Higharc Services immediately upon signing the addendum, the actual payment is tied to the successful sale of units within the franchisee's project. The franchisee is responsible for ensuring that the Technology Royalty payment is made at the time each unit sale closes, either directly or through an escrow agent, attorney, or other closing representative. Furthermore, the franchisee must provide Epcon Communities with a Settlement Statement or Settlement Disclosure Form, reflecting the Technology Royalty payment, no later than two days prior to the unit's closing.
In addition to the Technology Royalty, if a franchisee requests changes or modifications to the Development System plans to meet local zoning or building code requirements, and Epcon Communities approves these changes in writing, the franchisee will incur additional costs. These changes will be made solely by Higharc, and the franchisee will be obligated to pay Epcon Communities $200.00 per hour for Higharc's services related to these modifications. This hourly fee is billed in minimum increments of one hour and is due within ten business days of the invoice date.
It is important to note that Epcon Communities has the right to amend or terminate its agreement with Higharc at any time without notice to the franchisee. If the agreement is terminated, the franchisee's use of Higharc Services and the addendum automatically terminate. In such a case, the franchisee will not be required to pay the Technology Royalty on any units for which the sale has not closed by the termination date. This condition highlights a potential risk for franchisees, as their access to and payment obligations for Higharc Services are contingent on Epcon Communities' ongoing relationship with Higharc.