Are Epcon Communities franchisees required to provide copies of loan documents to the franchisor?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
5.5 Franchisee shall provide to Franchisor at the time of execution of this Agreement copies of Exhibit "3" attached to this Agreement (the "Personal Covenants Document") executed by each of the principals, officers, owners and directors of Franchisee or any sublicensee and any other individuals or entities with any ownership or control interest whatsoever (including any investors) in Franchisee or any sublicensee, and, during the term of this Agreement, if a change occurs in the principals, officers, owners, investor and/or directors of Franchisee or any sublicensee or in the other individuals or entities with an ownership or control interest in Franchisee or any sublicensee, Franchisee agrees that it will promptly deliver to Franchisor copies of the Personal Covenants Document executed by each of the new principals, officers, owners, or directors of Franchisee or other individuals or entities with an ownership or control interest (including any investors) in Franchisee or any sublicensee.
5.6 Additionally, Franchisee shall provide to Franchisor copies of the document included as Exhibit "3A" attached to this Agreement executed by each person who may be provided, either by Franchisee, Franchisor, or any sublicensee with more detailed information about the Development System than has been or will be disclosed to the general public, but whom is not otherwise subject to the requirements respecting the Personal Covenants Document set forth in Section 5.5 or to the provisions of the Personal Covenants Document.
A copy of the document included as Exhibit "3A" shall be individually executed before any such person is provided access to all or any portion of the Development System.
Franchisee's obligation to provide such executed copies of the document included as Exhibit "3A" to Franchisor shall be ongoing throughout the term of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Epcon Communities does not explicitly state that franchisees are required to provide copies of loan documents to the franchisor. However, the document does state that franchisees must provide copies of the Personal Covenants Document (Exhibit 3) executed by principals, officers, owners, and directors, as well as copies of Exhibit 3A executed by individuals with detailed knowledge of the Development System. These obligations are ongoing throughout the term of the Franchise Agreement.
While loan documents are not specifically mentioned, Exhibit I is a Lender Assignment Agreement and Exhibit J is a Mortgage, suggesting that loan-related documentation and lender relationships are relevant to the franchise agreement. The franchisee is obligated to adhere to the Operations Manual and the Sales and Marketing Manual, which Epcon Communities can modify, and these manuals could potentially include requirements related to financial documentation.
Prospective franchisees should clarify with Epcon Communities what specific financial documents, including loan documents, they are required to submit during the initial setup and throughout the term of the agreement. Understanding these requirements is crucial for managing the administrative and compliance aspects of the franchise.