What is an Epcon Communities franchisee required to do if litigation is instituted against them involving the Marks?

According to the 2025 Epcon Communities FDD, if a franchisee becomes aware of any unauthorized use of the Development System, Epcon Communities Works, or the Marks by third parties, they are required to promptly notify both the Franchisor and any Sublicensee. However, the FDD states that Epcon Communities retains the sole and exclusive right and discretion to initiate infringement or unfair competition proceedings related to the Development System, Epcon Communities Works, or the Marks. This means the franchisee's primary responsibility is to report any potential infringement to Epcon Communities, who will then decide whether to take legal action.

This notification requirement ensures that Epcon Communities maintains control over its brand and intellectual property. By centralizing the decision-making process for infringement actions, Epcon Communities can ensure consistency and protect the overall value of the brand. The franchisee is not expected to independently pursue legal action, which could be costly and beyond their expertise.

For a prospective franchisee, this means that while they have a duty to report potential infringements, they are not responsible for the legal costs or strategic decisions related to protecting the Marks. This can be a significant benefit, as it shields the franchisee from potentially burdensome legal obligations and allows them to focus on operating their Epcon Communities business. However, it also means that the franchisee must rely on Epcon Communities to take appropriate action to protect the brand, and they have limited control over the process.