When is the Epcon Communities franchisee required to remit the Point of Closing Royalty Payment?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
hisor'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) Point of Closing Royalty Payments: 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 the percentage determined from consulting the Point of Closing Royalty Percentage Table below (the "Applicable Percentage") multiplied by the Gross Sales Price of such Unit as provided in the applicable Settlement Statement or the total of the "Sale Price of the Property" and the "Sale Price of any personal property included in sale" in the Settlement Disclosure Form, or such lower amount, if applicable as provided in Section 5.2(d)(ii) (the "Point of Closing Royalty Payment"). However, in no event shall the Point of Closing Royalty Payment for each Unit be less than Three Thousand Dollars ($3,000.00), including instances in which there is a Volume-Based Reduction to Point of Closing Royalty Payments or Cap on Calculation of Point of Closing Royalty Payments, as described in subsection (ii) and (iii) below. No later than two days prior to a Unit's closing,
a Settlement Statement or Settlement Disclosure Form, reflecting the applicable Point of Closing Royalty Payment for such Unit, shall be provided to Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the Point of Closing Royalty Payment is due contemporaneously with the closing of the sale of each unit in the project. The franchisee is required to remit the payment at the time of closing, or ensure that the escrow agent, attorney, or any other person conducting the closing remits the payment.
The amount of the Point of Closing Royalty Payment is calculated by multiplying the Applicable Percentage by the Gross Sales Price of the unit, as detailed in the Settlement Statement or Settlement Disclosure Form. The Applicable Percentage is determined by consulting the Point of Closing Royalty Percentage Table. The FDD stipulates that no later than two days prior to a Unit's closing, a Settlement Statement or Settlement Disclosure Form, reflecting the applicable Point of Closing Royalty Payment for such Unit, shall be provided to Epcon Communities.
Epcon Communities will provide a partial mortgage release and/or partial security interest release releasing their lien against the applicable unit upon receiving each Point of Closing Royalty Payment, at the franchisee's request and expense. The minimum Point of Closing Royalty Payment for each unit is $3,000.00, even with Volume-Based Reduction or Cap on Calculation of Point of Closing Royalty Payments.