What happens if a voluntary bankruptcy petition is filed by Epcon Communities or on its behalf?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Through a license agreement with Home Page that was assigned to IP86 on April 15, 2016, we have the right to use the Marks and to license to you the use of the Marks for use in the development of your project(s) in accordance with the terms of your Franchise Agreement. Because we are a successor to ECFI, pursuant to the license agreement, ECFI's rights under the license agreement to use and license franchisees the rights to use the Intellectual Property became our rights on December 31, 2019. Our license agreement with IP86 is in effect until December 31, 2025, and renews automatically for successive one (1) year periods, unless prior to the expiration of the term, we or IP86 gives the other party at least three (3) months prior written notice of termination. 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 Epcon Communities' 2025 Franchise Disclosure Document, if a voluntary bankruptcy petition is filed by Epcon Communities or on its behalf, it could lead to the termination of their license agreement with IP86. This agreement grants Epcon Communities the right to use and license trademarks to franchisees. The license agreement with IP86 is in effect until December 31, 2025, and renews automatically for successive one-year periods unless either party provides a three-month written notice of termination.
Besides the bankruptcy filing, other events can trigger termination, including failure to pay royalties, assignment for the benefit of creditors, appointment of a receiver, custodian, trustee, or liquidator, suffering an order for relief under federal bankruptcy law, attachment of a material part of properties, failure to pay debts, concealment or removal of assets to hinder creditors, or transferring property for the benefit of a creditor when others haven't been paid.
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 even if Epcon Communities faces bankruptcy-related issues and loses its license agreement with IP86, franchisees should still be able to continue using the trademarks under the terms of their Franchise Agreement. Prospective franchisees should seek clarification from Epcon Communities on the specific mechanisms that ensure continued trademark use in such scenarios.