What is the Franchisee's obligation to protect Franchisor's materials, reputation, and goodwill for Epcon Communities?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
isor's grant of the franchise and license for the amounts of the fee(s) provided hereunder, and (b) agrees that any accommodation to Franchisee by Franchisor shall not be taken to establish any liability of Franchisor or any contract term inconsistent herewith. (Franchisee should refer to Article 8 hereof regarding its obligations concerning modifications to the Development System.)
- 4.3 In order to protect the reputation and goodwill of the Marks, the integrity of the Epcon Communities Works and to maintain uniform standards of development under the Marks, Franchisee shall conduct its operations hereunder in accordance with the Operations Manual and the Sales and Marketing Manual. Franchisee acknowledges that it will have access to each of the above listed manuals in electronic form on Franchisor's intranet, or in such other format determined by Franchisor in its sole discretion, subsequent to execution hereof and that the manuals are on loan from Franchisor for the term of this Agreement. These Manuals shall at all times remain solely the property of Franchisor. Franchisee shall treat the Manuals, any other materials created for or approved for its use by Franchisor, and the information contained therein as confidential, and shall use all reasonable efforts to maintain such information as secret and confidential. Franchisee shall not at any time, without Franchisor's prior written consent, copy, duplicate, record, or otherwise reproduce the Manuals, in whole or in part, nor otherwise make the same available to any unauthorized person. Franchisor shall have the right to add to or otherwise modify the Manuals from time to time to reflect changes in authorized products and services, specifications, standards or product quality, and operations of Franchisor Projects. In the event of a dispute as to the contents of the Manuals, the master copy of each Manual maintained by Franchisor at its principal place of business shall be controlling.
Article 5 Franchisee's Obligations
5.1 Franchisee shall pay to Franchisor an initial franchise fee (the "Initial Franchise Fee") in the amount of Seventy-Five Thousand Dollars ($75,000). The Initial Franchise Fee shall be fully earned, due and payable upon execution of this Agreement by Franchisor and is not refundable.
In the event the undersigned Franchisee, if an individual, or 50% or more of the ownership of the undersigned Franchisee, if a corporation, partnership, limited liability company, or similar entity, in Franchisor's sole and absolute discretion, enters into another franchise agreement for the development of an additional Project, the Initial Franchise Fee shall be in the amount of Five Thousand Dollars ($5,000), provided (a) the location of the additional Project is within 100 miles of a Project of Franchisee that is under development in accordance with a then-existing Franchise Agreement with us, and (b) if applicable, is in a state in which Franchisor has an effective registration of its Franchise Disclosure Document or has an effective franchise registration exemption.
5.2 In addition to the Initial Franchise Fee, Franchisee agrees to pay to Franchisor each of the following nonrefundable fees:
(a) Minimum Monthly Royalty: For each month during the term of this Agreement for which a Project is Under Development (as defined below), and for which Franchisee did not close on the sale of a Unit in the preceding month, Franchisee shall pay Franchisor a minimum monthly royalty (the "Minimum Monthly Royalty") on or before the fifteenth (15th) day of the month in the amount of Two Thousand Dollars ($2,000.00). Franchisee's obligation to pay the Minimum Monthly Royalty shall begin on the earlier of (i) the fifteenth day of the month for the month that is the thirtyseventh (37th) from the Effective Date of this Agreement, or (ii) the fifteenth (15th) day of the month immediately following the month in which there is the first closing of a sale of a Unit in the Project.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Agreement, franchisees have several obligations to protect the franchisor's materials, reputation, and goodwill. Epcon Communities franchisees must conduct their operations in accordance with the Operations Manual and the Sales and Marketing Manual to maintain uniform standards of development. These manuals, along with any other materials created or approved by Epcon Communities, must be treated as confidential and kept secret. Franchisees are prohibited from copying, duplicating, or reproducing the manuals without prior written consent from Epcon Communities, ensuring that the information is not made available to unauthorized individuals.
To further protect the Development System, the Epcon Communities Works, the Marks, and the associated goodwill, franchisees must identify their projects in advertising as prescribed in the manuals and use the designated Marks without unauthorized modifications. Epcon Communities retains the right to restrict the franchisee's use of their business entity name or trade name in advertising and promotional materials. Franchisees must also observe reasonable requirements regarding service mark, trade name, trademark, fictitious name registrations, and copyright and patent ownership notices as directed by Epcon Communities in writing.
Additionally, franchisees agree to preserve the integrity of Epcon Communities' materials, reputation, and goodwill in every way possible, recognizing the distinctive significance and value of the Development System. Upon termination or expiration of the Franchise Agreement, franchisees must immediately cease using the Marks, the Epcon Communities Works, and the Development System, and promptly return all materials provided by Epcon Communities. The franchisor may enter the franchisee's premises to remove or obliterate any Marks at the franchisee's expense, with the franchisee indemnifying Epcon Communities against any claims of property damage during this process. These measures collectively ensure the protection of Epcon Communities' brand and proprietary information.