If an action is brought against Epcon Communities, what is the franchisee's responsibility regarding resisting and defending the action?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Development System, including, without limitation, the use of any prototypical or architectural plans and designs provided by Franchisor. Franchisee shall also indemnify Franchisor from any action, suit, proceeding, claim, demand, investigation or inquiry (formal or informal), or any settlement thereof brought against Franchisor by any of Franchisee's principals, officers, directors, owners, investors or partners. In the event that any action, suit, proceeding, investigation or inquiry is instituted, or any claim or demand is asserted against or involving Franchisor, Franchisee shall resist and defend such action, suit, proceeding, investigation, inquiry, claim or demand at Franchisee's sole cost and expense or shall cause it to be resisted or defended by an insurer. Franchisee shall also make every reasonable effort to seek to have Franchisor dismissed or released from liability in the event of such action, suit, proceeding, investigation, inquiry, claim or demand. Franchisor shall have the right to resist and defend itself in and/or against any such action, suit, proceeding, investigation, inquiry, claim or demand, and, upon receipt of written notice from Franchisor of the amount expended by Franchisor in such defense, Franchisee shall, within ten business days of such receipt, reimburse Franchisor in full for the total amount of such expenses.
- 16.2 Franchisee shall at all times during the term of this Agreement, and at its own expense, keep in force by advance payment of premium general liability insurance in an amount not less than One Million Dollars ($1,000,000.00) per occurrence and in the amount of not less than Two Million Dollars ($2,000,000.00) per Project annual aggregate, arising out of a single accident, and with a deductible or self-insured retention on any such policy of not greater than One Thousand Dollars ($1,000.00), or such other amounts of coverage and self-insurance as Franchisor may specify from time to time, insuring Franchisee against any liability that may accrue by reason of the development by Franchisee of Project(s). Such policy shall include coverage for liability arising from premises-operations, independent contractors and products-completed operations. The policy shall not contain any restrictive endorsements or policy language which excludes coverage for residential construction, work performed by subcontractors on your behalf, or liability assumed under construction contracts.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, if any action, suit, proceeding, investigation, or inquiry is instituted against Epcon Communities, the franchisee is responsible for resisting and defending such actions at their own expense. Alternatively, the franchisee can ensure that their insurer resists or defends the action. This obligation extends to any claims, demands, or settlements that may arise.
Furthermore, the franchisee is obligated to indemnify and hold harmless Epcon Communities from any liabilities, costs, and expenses, including attorney's fees, that arise from a breach of specific sections within the agreement. This indemnification covers claims, debts, liabilities, losses, expenses, or obligations, including damages, fines, charges, costs, lost profits, attorney's fees, court costs, settlement amounts, and judgments. The franchisee must also indemnify Epcon Communities from actions brought against them by the franchisee's own principals, officers, directors, owners, investors, or partners.
In addition to the franchisee's duty to defend and indemnify Epcon Communities, the franchisee must make every reasonable effort to have Epcon Communities dismissed or released from liability in the event of any action, suit, proceeding, investigation, inquiry, claim, or demand. However, Epcon Communities retains the right to resist and defend itself in any such action. If Epcon Communities incurs expenses in its defense, it will provide written notice to the franchisee, who must then reimburse Epcon Communities in full for the total amount of such expenses within ten business days of receiving the notice.