What is the limit of liability for Epcon Communities Franchisor to the Franchisee?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
east the software, as specified by Franchisor in writing from time to time to its Epcon Communities franchisees. Franchisee understands that compliance with its obligations in this Section 5.10 may require it to purchase new hardware and software or upgrades to existing hardware and software, as specified by Franchisor in writing from time to time to its Epcon Communities franchisees. As to any malfunctioning of the any computer system or any website as further described in this Agreement, neither Franchisor nor any affiliate will be liable to Franchisee for any consequential, incidental, indirect, economic, special, exemplary or punitive damages, such as, but not limited to, loss of revenue or anticipated profits or lost business.
Franchisee shall obtain and maintain any and all equipment and services necessary to connect to the website referenced in Section 7.5 and to receive electronic communications from Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the franchisor has specific limitations regarding liability to the franchisee, particularly concerning malfunctioning computer systems or websites. Epcon Communities, nor its affiliates, will be liable for any consequential, incidental, indirect, economic, special, exemplary, or punitive damages that a franchisee may incur due to malfunctions. This includes, but is not limited to, loss of revenue, anticipated profits, or lost business. This limitation of liability is explicitly outlined in Section 5.10 of the franchise agreement.
This means that if a franchisee experiences financial losses or other damages as a result of technical issues with computer systems or websites used in their Epcon Communities business, they will not be able to recover these losses from the franchisor. This is a significant risk for franchisees, as reliable technology is crucial for business operations. Franchisees are responsible for ensuring they have the necessary equipment and services to connect to the website and receive electronic communications from Epcon Communities, and for promptly notifying Epcon Communities of any changes to their contact information.
Furthermore, Minnesota Statute 604.113 limits the amount Epcon Communities may charge franchisees who do not have sufficient funds for payment that is due and owing to Epcon Communities at $30 per occurrence. This statute provides a small measure of protection for franchisees in Minnesota who may face temporary financial difficulties. However, it is important to note that this protection is limited to the amount charged for insufficient funds and does not cover other potential liabilities or damages.
Prospective franchisees should carefully consider these limitations of liability and ensure they have adequate insurance and risk management strategies in place to protect their business from potential losses due to technology malfunctions or other unforeseen circumstances. It would be prudent to discuss these limitations with the franchisor and seek legal counsel to fully understand the implications before entering into a franchise agreement with Epcon Communities.