What happens to outstanding obligations related to the Epcon Communities business if the franchisee transfers the franchise?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor shall not unreasonably withhold its consent to a transfer of any interest in Franchisee or in this Epcon Communities franchise, provided, however, that prior to the time of transfer, Franchisor may, in its sole discretion, require that:
(a) All of Franchisee's accrued monetary obligations to Franchisor and all other outstanding obligations related to the business franchised hereunder shall have been satisfied, or will be satisfied through the transfer;
(b) The transferor's right to receive compensation, pursuant to any agreement or agreements for the purchase of any interest in Franchisee or in the business franchised hereunder, shall be subordinate and secondary to Franchisor's rights to receive any outstanding monetary obligation or other outstanding obligations due from transferor or Franchisee pursuant to this Agreement, and whether arising before or after the transfer;
(c) Franchisee shall have executed a general release in a form satisfactory to Franchisor, effective as of the date of transfer, of any and all claims against Franchisor and its officers, directors, shareholders, and employees in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances.
(d) The transferee franchisee shall enter into a written assumption, in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's obligations under this Agreement prior to and after the date of the assumption;
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, if a franchisee seeks to transfer their franchise, all accrued monetary obligations and other outstanding obligations related to the franchised business must be satisfied, or provisions must be made to ensure they will be satisfied through the transfer.
Furthermore, the transferor's right to receive compensation from the sale is secondary to Epcon Communities' right to receive any outstanding monetary obligations. This means Epcon Communities will be paid what it is owed before the franchisee receives any proceeds from the transfer. The franchisee must also execute a general release of all claims against Epcon Communities.
In addition, the transferee must enter into a written agreement assuming and agreeing to discharge all of the franchisee's obligations under the Franchise Agreement, both before and after the date of the assumption. This ensures that the new franchisee is legally bound to fulfill all responsibilities outlined in the original agreement.