Does the non-competition covenant for Epcon Communities franchisees during the franchise term include real estate development projects targeting 55+ home buyers?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not, during the term of this Agreement, without the prior written consent of Franchisor, directly or indirectly, either as a principal, agent, employee, officer, director or member of any corporation or other business entity, as a partner or sole proprietor, or in any other way, own, develop, construct or have any interest in any real estate development project that is age-restricted or for which the targeted buyers are the 55+ home buyer, and includes, without limitation, detached and/or attached ranch-style homes (with or without basements or a second floor) that are similar to the homes and communities depicted in Franchisor's Development System; provided however, this provision shall not apply to the involvement by Franchisee in the development of other Epcon Communities Projects by other franchisee business entities, or to any ownership by Franchisee of less than three percent (3%) of the outstanding stock of any publicly held corporation.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, during the term of the franchise agreement, franchisees are restricted from engaging in real estate development projects that target the 55+ home buyer demographic. Specifically, without prior written consent from Epcon Communities Franchising, LLC, a franchisee cannot directly or indirectly own, develop, construct, or have any interest in age-restricted real estate projects. This includes detached and/or attached ranch-style homes (with or without basements or a second floor) that are similar to the homes and communities depicted in Epcon Communities' Development System.
This non-compete provision applies to the franchisee acting as a principal, agent, employee, officer, director, member of any corporation or other business entity, partner, or sole proprietor. However, there are exceptions to this restriction. Franchisees are permitted to be involved in the development of other Epcon Communities projects by other franchisee business entities. Also, the restriction does not apply to ownership of less than three percent (3%) of the outstanding stock of any publicly held corporation.
This restriction is designed to protect Epcon Communities' market and brand identity by preventing franchisees from using the franchisor's system and expertise to compete against it within the same market. For a prospective franchisee, this means that during the term of their agreement, they must focus solely on developing Epcon Communities projects or obtain explicit written consent to pursue other real estate ventures targeting the 55+ demographic. This is a fairly standard non-compete clause in franchising, intended to maintain brand consistency and prevent direct competition from those who have access to the franchisor's proprietary information and systems.