What is the geographic scope of the Initial Market Area for an Epcon Communities franchise?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
hereto cannot mutually agree on a Market Area within eighteen (18) months of the Effective Date, then this Initial Market Area and the Franchise Agreement shall automatically terminate and Franchisor and Franchisee shall release each other of any future obligations under this Initial Market Area Agreement and the Franchise Agreement, whether monetary or otherwise, except for those provisions that specifically survive termination.
The Initial Market Area for this Initial Market Area Agreement shall be as depicted on the map attached hereto as Exhibit "A" and incorporated herein for all purposes.
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- 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.
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- Franchisee agrees to fully implement the Development System only within the Initial Market Area depicted on Exhibit "A". Franchisee agrees that Franchisor's review and expressed opinion about any Project location proposed by Franchisee 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 Initial 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.
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- Franchisee shall make all payments specified in the Franchise Agreement to Franchisor.
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- Franchisee shall not use or allow to be used the Development System anywhere except at the agreed location within the Initial Market Area specified in this Initial Market Area Agreement executed by and between Franchisor and Franchisee. Franchisee agrees that any unauthorized and unacknowledged use would be in violation of the terms of this Initial Market Area Agreement and of the Franchise Agreement and further 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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- Except as otherwise provided for in this Initial Market Area Agreement, during the term of the Franchise Agreement, Franchisee shall have certain limited exclusivity rights (the "Limited Rights") to the Initial Market Area depicted on Exhibit "A" pursuant to the terms and conditions set forth below in this Section 7. 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 Initial 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.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, the Initial Market Area for a franchise is defined by a map attached as Exhibit "A" to the Initial Market Area Agreement and incorporated into the agreement. Epcon Communities grants the franchisee a license to use its Development System, and it aims to protect its materials, brand reputation, and goodwill by geographically limiting the franchisee's use of the Development System. These restrictions are considered essential for the success of the franchisee's projects and those of other Epcon Communities franchisees and licensees.
The franchisee must fully implement the Development System only within the Initial Market Area depicted on Exhibit "A". Epcon Communities' review and opinion about any project location proposed by the franchisee is only an opinion based on the franchisor's criteria for locations and limited information about the franchisee's market area. This review does not constitute a guarantee of success for the project at the proposed location. The franchisee is solely responsible for deciding whether to proceed with development based on their own analysis.
The franchisee is prohibited from using the Development System outside the agreed location within the Initial Market Area specified in the Initial Market Area Agreement. Unauthorized use would violate the Initial Market Area Agreement and the Franchise Agreement, giving Epcon Communities the right to exercise the remedies outlined in the Franchise Agreement. During the term of the Franchise Agreement, the franchisee has certain limited exclusivity rights within the Initial Market Area depicted on Exhibit "A".
While these limited rights are in effect, Epcon Communities agrees not to grant any other licensee or franchisee the right to begin construction (nor to itself begin construction) of a project using the Development System within the Initial Market Area shown on Exhibit "A". The Market Area is intended to define a geographic area that will generate sufficient purchaser support for a development, typically considering existing natural and man-made boundaries and socioeconomic conditions.