What is the Epcon Communities franchisee's responsibility to have the franchisor dismissed from liability in case of a claim?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
pals, officers, directors, owners, investors or partners. In the event that any action, suit, proceeding, investigation or inquiry is instituted, or any claim or demand is asserted against or involving Franchisor, Franchisee shall resist and defend such action, suit, proceeding, investigation, inquiry, claim or demand at Franchisee's sole cost and expense or shall cause it to be resisted or defended by an insurer. Franchisee shall also make every reasonable effort to seek to have Franchisor dismissed or released from liability in the event of such action, suit, proceeding, investigation, inquiry, claim or demand. Franchisor shall have the right to resist and defend itself in and/or against any such action, suit, proceeding, investigation, inquiry, claim or demand, and, upon receipt of written notice from Franchisor of the amount expended by Franchisor in such defense, Franchisee shall, within ten business days of such receipt, reimburse Franchisor in full for the total amount of such expenses.
- 16.2 Franchisee shall at all times during the term of this Agreement, and at its own expense, keep in force by advance payment of premium general liability insurance in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the amount of not less than Two Million Dollars ($2,000,000.00) per Project annual aggregate, arising out of a single accident, and with a deductible or self-insured retention on any such policy of not greater than One Thousand Dollars ($1,000.00), or such other amounts of coverage and self-insurance as Franchisor may specify from time to time, insuring Franchisee against any liability that may accrue by reason of the development by Franchisee of Project(s). Such policy shall include coverage for liability arising from premises-operations, independent contractors and products-completed operations. The policy shall not contain any restrictive endorsements or policy language which excludes coverage for residential construction, work performed by subcontractors on your behalf, or liability assumed under construction contracts. The policy shall name Epcon Communities Franchising, LLC as an additional insured, using ISO Additional Insured Endorsement CG20
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, a franchisee must make every reasonable effort to have Epcon Communities dismissed or released from liability if any action, suit, proceeding, investigation, inquiry, claim, or demand arises. This requirement places a responsibility on the franchisee to actively work towards protecting Epcon Communities from potential legal issues.
Furthermore, Epcon Communities retains the right to defend itself against any such action, suit, or claim. If Epcon Communities incurs expenses in its defense, it will provide written notice to the franchisee detailing the amount spent. The franchisee is then obligated to reimburse Epcon Communities for the full amount of these expenses within ten business days of receiving the notice. This financial responsibility highlights the importance of the franchisee's initial effort to seek dismissal or release of Epcon Communities from liability.
To mitigate potential liabilities, Epcon Communities requires franchisees to maintain general liability insurance. This insurance must provide coverage of at least $1,000,000 per occurrence and $2,000,000 per project annually, with a deductible or self-insured retention no greater than $1,000. The policy must include coverage for liabilities arising from premises-operations, independent contractors, and products-completed operations, and it must name Epcon Communities Franchising, LLC as an additional insured. Franchisees must also carry worker's compensation insurance and commercial auto liability insurance with limits of at least $1,000,000 per occurrence.