What happens if Epcon Communities does not pay its debts as they become due?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, the agreement may be terminated if: (1) we fail to pay royalty payments under the license agreement when they are due; (2) any of the following relating to bankruptcy occur: (i) we make an assignment for the benefit of creditors or enter into an arrangement with our creditors, (ii) a receiver, custodian, trustee or liquidator is appointed for us or for a material part of our properties, or proceedings are commenced seeking appointment of a receiver, custodian, trustee or liquidator and is not dismissed within 60 days, (iii) a voluntary bankruptcy petition is filed by us or on our behalf, (iv) we suffer an order for relief under federal bankruptcy law or apply for, consent to or authorize an application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, liquidation or other similar law, or proceedings are commenced seeking an application and is not dismissed within sixty (60) days, (v) a material part of our properties are attached or subjected to a lien, which is not removed within sixty (60) days, (vi) we do not pay our debts as they become due, (vii) we conceal or remove a material part of our assets, with an intent to hinder or delay our creditors, or (viii) we transfer a material part of our property for the benefit of a creditor at a time when other similar creditors have not been paid, or (3) we fail to cure a default under the license agreement. Termination of the license agreement with IP86 will not materially alter your rights to use the trademarks.
Source: Item 13 — TRADEMARKS (FDD pages 50–53)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, if Epcon Communities fails to pay its debts as they become due, it could trigger the termination of its license agreement with IP86. This agreement grants Epcon Communities the right to use and license trademarks to its franchisees. The license agreement with IP86 is in effect until December 31, 2025, and automatically renews for one-year periods unless either party provides a three-month written notice of termination.
Specifically, the license agreement can be terminated if Epcon Communities does not pay its debts as they become due. Other bankruptcy-related events that could trigger termination include assigning assets for the benefit of creditors, the appointment of a receiver, the filing of a bankruptcy petition, or the attachment of a material part of Epcon Communities' properties.
However, the FDD states that the termination of the license agreement with IP86 will not materially alter a franchisee's rights to use the trademarks. This suggests that while the relationship between Epcon Communities and IP86 might change, the franchisee's ability to operate under the Epcon Communities brand should remain intact.