When must the Epcon Communities franchisee reimburse the franchisor for mortgage-related costs?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
or any other person conducting closings for Units in the Project of Franchisee's obligation to pay Point of Closing Royalty payments to Franchisor. In the event Franchisee increases the number of Units in its Project after Franchisee's delivery of the mortgage, Franchisor may require an increase in the amount of the mortgage or other security 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)
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, a franchisee is required to reimburse Epcon Communities for all costs, expenses, and fees related to obtaining the franchisor's mortgage or other security. This includes legal fees, filing fees, and recording fees. The franchisee must make this reimbursement either upon the closing of its financing with its lender or within fifteen (15) days of Epcon Communities submitting an invoice to the franchisee.
This means that if you, as a prospective Epcon Communities franchisee, take out a mortgage to finance your project, you will be responsible for covering Epcon Communities' expenses related to securing their interest in the mortgage. These expenses can include legal work to document the mortgage, as well as the costs of filing the mortgage documents with the relevant authorities.
The timing of this reimbursement is important. You need to be prepared to pay these costs either when your financing closes or within 15 days of receiving an invoice from Epcon Communities. This could impact your initial cash flow and should be factored into your financial planning. It is advisable to clarify with Epcon Communities what these costs might typically amount to, so you can budget accordingly and avoid any surprises.
It is also important to note that Epcon Communities has the discretion to accept alternative forms of security in place of a mortgage, such as a deed of trust, letter of credit, or security agreement. Additionally, if the franchisee increases the number of units in their project after the mortgage is delivered, Epcon Communities may require an increase in the mortgage amount or additional security.