What happens to the goodwill associated with the Epcon Communities Development System upon termination of the franchise agreement?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
and effect until the earlier of (a) the date of the sale of the last unit of Sublicensee's Epcon Communities project (b) the date that is one year after the completion of construction (as defined by Section 11.1 of the Franchise Agreement) of the last unit of Sublicensee's Epcon Communities project or (c) the date of the termination of the Franchise Agreement (the "Term").
-
- Ownership of Development System, Epcon Communities Works and Marks. Sublicensee acknowledges Franchisor's sole and exclusive rights in and to the Development System, Epcon Communities Works and the Marks, and Sublicensee agrees that it will do nothing inconsistent with such rights and interests and that all use of the Development System, Epcon Communities Works and the Marks by Sublicensee shall inure to the benefit of and be on behalf of Franchisor. If requested by Franchisor or Franchisee, Sublicensee agrees to assist Franchisor in recording this Sublicense Agreement with the appropriate governmental authorities. Sublicensee agrees that nothing in this Sublicense Agreement shall give Sublicensee any right, title or interest in any of the Development System, Epcon Communities Works or the Marks other than the right to use the Development System, Epcon Communities Works and the Marks in accordance with this Sublicense Agreement, and Sublicensee agrees that it will not attack the title of Franchisor to the Development System, Epcon Communities Works or the Marks or attack the validity of the Franchise Agreement or validity of the sublicense granted pursuant to this Sublicense Agreement. Sublicensee acknowledges and agrees that its strict compliance with the provisions of this Sublicense Agreement is a condition precedent to its sublicense to utilize the Epcon Communities Works, and as such any use of such works in violation of any of these provisions is unauthorized and will be acts of copyright infringement.
-
- Termination. This Sublicense Agreement may be terminated in compliance with Article 13 of the Franchise Agreement. Upon the effective date of any termination of this Sublicense Agreement and, in any event, upon expiration of the Term, Sublicensee shall, immediately upon the effective date of such termination or the expiration of the Term, as the case may be, discontinue all use of the Development System, Epcon Communities Works and the Marks and any terms or logos confusingly similar thereto, shall cooperate with Franchisor and Franchisee or their appointed agents in applying to the appropriate governmental authorities to cancel recording of this Sublicense Agreement from all government records and shall destroy all existing inventory of materials and all advertising, promotional and other printed materials bearing the Marks.
-
- Infringement Actions. Sublicensee shall notify Franchisee and Franchisor of any unauthorized use of the Development System, Epcon Communities Works or the Marks by third parties promptly as it comes to Sublicensee's attention. Franchisor shall have the sole and exclusive right and discretion to bring infringement or unfair competition proceedings involving the Development System, Epcon Communities Works or the Marks.
-
- **ACKNOWLEDGMENT OF EXISTENCE OF THIRD-PARTY BENEFICIARY OF THIS AGREEMENT, EPCON COMMUNITIES FRANCHISING, LLC. FRANCHISEE AND SUBLICENSEE ACKNOWLEDGE AND AGREE THAT EACH CONTEMPLATES AND INTENDS THAT: (A) THIS AGREEMENT AND ITS SPECIFIC PROVISIONS ARE INTENDED DIRECTLY AND PRIMARILY TO BENEFIT FRANCHISOR, AND FRANCHISOR IS INTENDED TO BE, AND SHALL BE, A THIRD-PARTY BENEFICIARY OF THIS AGREEMENT; (B) SUBLICENSEE, IN EXECUTING THIS AGREEMENT, SHALL ASSUME A DIRECT OBLIGATION TO FRANCHISOR, AS SUCH THIRD-PARTY BENEFICIARY, TO PERFORM CERTAIN OF FRANCHISEE'S OBLIGATIONS UNDER THE FRANCHISE AGREEMENT;
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, the goodwill associated with the Epcon Communities Development System remains the sole and exclusive property of the franchisor. The franchisee acknowledges Epcon Communities's rights to the Development System, Epcon Communities Works, and the Marks. The franchisee agrees not to act in any way that is inconsistent with the franchisor's rights and interests. All use of the Development System, Epcon Communities Works, and the Marks by the franchisee benefits Epcon Communities.
Upon termination of the Sublicense Agreement, the franchisee must immediately discontinue all use of the Development System, Epcon Communities Works, and the Marks, including any confusingly similar terms or logos. The franchisee is required to cooperate with Epcon Communities in canceling the recording of the Sublicense Agreement with governmental authorities. Additionally, the franchisee must destroy all existing inventory of materials and all advertising, promotional, and other printed materials bearing the Marks.
Furthermore, for two years following the termination or expiration of the agreement, the franchisee is restricted from engaging in the ownership, development, or construction of similar real estate projects targeting the 55+ home buyer within a ten-mile radius of any market area granted to another franchisee. This includes detached or attached ranch-style homes similar to those depicted in Epcon Communities's Development System. This non-compete clause protects Epcon Communities's goodwill and market presence after the franchise agreement ends.