What is the Epcon Communities franchisee's responsibility if a claim is made against the franchisor?
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 the 2025 Epcon Communities Franchise Disclosure Document, a franchisee has specific responsibilities if a claim is made against the franchisor. The franchisee must make every reasonable effort to have Epcon Communities dismissed or released from liability in the event of any action, suit, proceeding, investigation, inquiry, claim, or demand.
Furthermore, Epcon Communities has the right to defend itself against any such claim. If Epcon Communities provides written notice to the franchisee of the expenses incurred in its defense, the franchisee is required to reimburse Epcon Communities in full for the total amount of these expenses within ten business days of receiving the notice.
In addition to these obligations, the franchisee is required to maintain general liability insurance during the term of the agreement. This insurance must have a minimum coverage of $1,000,000 per occurrence and $2,000,000 per project annual aggregate, with a deductible or self-insured retention of no more than $1,000. The policy must name Epcon Communities Franchising, LLC as an additional insured and include coverage for various liabilities, including those arising from premises-operations and work performed by subcontractors. The franchisee must also carry worker's compensation insurance and commercial auto liability insurance with limits of at least $1,000,000 per occurrence.