What is the Epcon Communities franchisee obligated to do regarding closings for Units in the Project?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 Franchisee agrees to use its best efforts to complete, within a reasonable time, each Unit begun in connection with any Project so that no Unit remains incomplete for more than two hundred seventy (270) days after commencement of construction.
- 11.4 In the event Franchisee's license to use the Development System at a Project is terminated prior to completion of construction of all Units in the Project, such that Franchisee is prohibited from using the Development System or any part thereof for any reason, Franchisee may, at Franchisor's sole discretion, be granted a limited license by Franchisor to complete construction of any Units then under construction if and only if (i) construction of such Unit(s) has commenced prior to the effective date of termination or alternatively such Unit(s) are the subject of a non-contingent sale-purchase contract between Franchisee and a third-party, and (ii) Franchisee pays Franchisor a Point of Closing Royalty Payment for such Unit(s) pursuant to the terms and conditions herein. In all events, Franchisee's right to complete construction of such Unit(s) shall expire two (2) years after the effective date of termination.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, a franchisee must use their best efforts to complete each unit within a reasonable time. Specifically, no unit should remain incomplete for more than 270 days after construction commences. This requirement ensures projects progress in a timely manner and reduces potential delays that could impact revenue and customer satisfaction.
If the franchisee's license to use the Epcon Communities Development System is terminated before all units in a project are completed, the franchisee may be granted a limited license to finish construction at Epcon Communities's discretion. This is contingent upon construction having started before the termination date, or if the unit is under a non-contingent sale-purchase contract with a third party. In such cases, the franchisee must pay Epcon Communities a Point of Closing Royalty Payment for each unit.
Even with a limited license, the franchisee's right to complete construction expires two years after the termination date. This provision protects Epcon Communities by preventing prolonged use of its Development System by a former franchisee, while still allowing for the completion of ongoing projects. This ensures a smooth transition and protects the brand's reputation.