What is the geographic scope of the franchise granted to an Epcon Communities Franchisee?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
EXHIBIT "B"*
(to Initial Market Area Agreement – Market Area Agreement)
EXHIBIT D OF FRANCHISE DISCLOSURE DOCUMENT
(Exhibit "B" to Initial Market Area Agreement and Exhibit "2" to Franchise Agreement)
MARKET AREA AGREEMENT
(For use with franchisees located in the States of California, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Virginia and Wisconsin.)
| This Market Area Agreement (this "Market Area Agreement") is made by and between Epcon Communities Franchising, LLC, an Ohio limited liability company having its principal business offices at 500 Stonehenge Parkway, | ||
|---|---|---|
| a(n) | Dublin, Ohio 43017 (hereinafter referred to as "Franchisor"), and, | |
| having | ||
| its | ||
| principal | ||
| business | ||
| offices | ||
| at | ||
| (hereinafter referred to as "Franchisee"), | ||
| to be effective as of the date executed by Franchisor (the "Effective Date"). | ||
| Pursuant to the terms of the Franchise Agreement, dated, made by and between the parties | ||
| hereto (the "Franchise Agreement"), Franchisor and Franchisee make the following agreement, intending to be legally | ||
| bound thereby: | ||
| 1. | Each term set forth herein having initial capital letters shall have the meaning as set forth herein or, if not defined | |
| herein, as specified in the Franchise Agreement. | ||
| 2. | For purposes of this Market Area Agreement, the term "Market Area" is intended to define a geographic area that | |
| will generate sufficient purchaser support for a development. The area included within the Market Area typically | ||
| takes into consideration existing natural and man-made boundaries and socioeconomic conditions. The Market | ||
| Area for this Market Area Agreement shall be as depicted on the map attached hereto as Exhibit "A" and | ||
| incorporated herein for all purposes. | ||
| 3. | Franchisor, having granted to Franchisee a license to use the Development System pursuant to the terms and | |
| conditions of the Franchise Agreement, desires to further protect its materials, reputation, and goodwill and to | ||
| geographically limit use by Franchisee of the Development System in an ordered and controlled manner. | ||
| Franchisee agrees that such restrictions are essential to the success of the Project and the projects of other | ||
| franchisees and licensees of Franchisor. | ||
| 4. | Franchisee agrees to fully implement the Development System only within the Market Area depicted on Exhibit "A" | |
| and at the location or address hereinafter specified: | ||
| Proposed Name of Project: | ||
| Projected Number of Units in the Project: | ||
| Franchisee agrees that Franchisor's review and expressed opinion about Franchisee's proposed location is only | ||
| Franchisor's opinion respecting how the site meets Franchisor's criteria for locations for Epcon Communities | ||
| Projects and is based upon Franchisor's limited information about Franchisee's Market Area. It does not constitute | ||
| a representation, warranty, or an acknowledgment by Franchisor or any employee or agent of Franchisor that an | ||
| Epcon Communities Project at the proposed location will be successful. | ||
| 5. | Franchisee shall make all payments specified in the Franchise Agreement to Franchisor. |
Franchisee agrees that it shall not use or allow to be used the Development System anywhere except at the location within the Market Area specified in this Market Area Agreement executed by and between Franchisor and Franchisee. Franchisee further agrees that any unauthorized and unacknowledged use would be in violation of the terms of this Market Area Agreement and of the Franchise Agreement and agrees that any such breach shall afford to Franchisor each of the rights and remedies set forth in the Franchise Agreement.
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- During the term of the Franchise Agreement, Franchisee shall have certain limited exclusivity rights (the "Limited Rights") to the Market Area depicted on Exhibit "A" pursuant to the terms and conditions set forth below in this Section 8. While such Limited Rights are in effect, Franchisor agrees to grant to no other licensee or franchisee the right to commence construction (nor to itself commence construction) of a Project utilizing the Development System within the Market Area depicted on Exhibit "A". The parties agree that this grant of certain limited exclusivity rights is contractual only, and is neither intended nor shall be interpreted to transfer any of Franchisor's exclusive rights under United States copyright law to anyone, including Franchisee.
The Limited Rights respecting the Market Area depicted on Exhibit "A" shall terminate (i) thirty (30) months following the Effective Date of this Market Area Agreement or (ii) immediately upon the occurrence of any of the following:
- a) Franchisee at any time is not in full compliance with the provisions of the Franchise Agreement or this Market Area Agreement.
- b) The date of completion (as defined by Section 11.1 of the Franchise Agreement) of all buildings in the Project described in Section 4 above.
- c) That date on which the rights to use the Development System are terminated pursuant to the Franchise Agreement or as set forth below in Section 9.
- d) Any assertion by Franchisee, or anyone claiming to be an assignee or beneficiary of Franchisee's rights, that the Limited Rights affected any transfer of any portion of Franchisor's copyrights in any copyrighted work. In the event of any such assertion, Franchisee agrees that it automatically assigns to Franchisor any and all putative rights (including in any and all causes of action for infringement) in all such copyrighted works.
Upon the termination of the Limited Rights, Franchisor shall have the right to grant to any entity the license to use, or may itself use (or may permit its business entity affiliate to use), the Development System to develop a project or projects within the Market Area set forth in Exhibit "A".
- This Agreement shall automatically terminate on the effective date of any termination or expiration of the Franchise Agreement. Franchisee shall be prohibited from using the Development System or any part thereof for any reason thereafter; provided, however, that if Franchisee is then current on all payments of Minimum Monthly Royalty payments and Point of Closing Royalty payments to Franchisor, Franchisor may grant Franchisee a limited license, which shall exclude the Limited Rights, to complete construction of any Unit(s) in the Project previously identified in this Market Area Agreement, provided Franchisee pays Franchisor a Point of Closing Royalty Payment for such Unit(s), Minimum Monthly Royalty payments and the Marketing Program Fees, pursuant to the terms and conditions set forth in the Franchise Agreement and otherwise remains, during the term of the limited license, in full compliance with the terms and conditions set forth in the Franchise Agreement. Notwithstanding anything to the contrary herein, Franchisee's right to complete construction of such Unit(s) shall expire two (2) years after the effective date of termination.
[signature page follows]
IN WITNESS WHEREOF the parties hereto, intending to be legally bound hereby, have duly executed and delivered this Market Area Agreement.
[Name, Title] [Name, Title] Franchisor: Epcon Communities Franchising, LLC Joseph R. Karpowicz, General Counsel Paul W.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the geographic scope of the franchise is defined by either an Initial Market Area or a Market Area, as depicted on a map attached as Exhibit "A" to the Initial Market Area Agreement or the Market Area Agreement. Epcon Communities limits the franchisee's use of its Development System to these defined geographic areas to protect its materials, reputation, and goodwill, and to ensure ordered and controlled growth. Franchisees must fully implement the Development System only within their designated area.
Epcon Communities' review of a franchisee's proposed project location is only an opinion based on the franchisor's criteria and limited information about the area. It does not guarantee the project's success. The franchisee is responsible for independently analyzing the location and bears the risk if the project does not meet expectations. Franchisees are obligated to make all payments specified in the Franchise Agreement.
Furthermore, franchisees are prohibited from using the Development System outside their designated Initial Market Area. Unauthorized use constitutes a breach of both the Initial Market Area Agreement and the Franchise Agreement, entitling Epcon Communities to exercise its rights and remedies. During the term of the Franchise Agreement, franchisees have limited exclusivity rights within their Initial Market Area, preventing Epcon Communities from granting another franchisee the right to commence construction within that area.
Following termination or expiration of the franchise agreement, the franchisee is restricted for two years from engaging in similar real estate development projects within ten miles of any Initial Market Area, Market Area, or Reserved Market Area granted to other franchisees, or within ten miles of any real estate development project of Epcon Communities, LLC or its affiliates. This restriction applies to various roles, including principal, agent, employee, officer, director, member, partner, or sole proprietor. This non-compete clause extends to anyone holding an ownership interest in the franchisee if the franchisee is a business entity.