What is the obligation of the Epcon Communities franchisee to remit payment for the Higharc Services?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchisee acknowledges that Franchisor may, in its sole discretion, suspend, limit or revoke a Franchisee's right to use the Higharc Services if Franchisor determines that Franchisee, its agents, employees or owners, have failed to comply with the requirements and obligations pertaining to the Higharc Services. Notwithstanding any such suspension, limitation or revocation described above, the obligations of Franchisee to pay the Technology Royalty under this Addendum will continue without reduction until such time as all amounts owed by Franchisee to Franchisor under the terms of this Addendum are indefeasibly paid in full.
In consideration for use of the Higharc Services, commencing with the date of execution of this Addendum, contemporaneously with the closing of the sale of each Unit in the Project, Franchisee shall remit (or have the escrow agent, attorney, or any other person conducting closings remit) a payment to Franchisor in an amount equal to One-Thousand Five Hundred No/100 Dollars ($1,500.00) (the "Technology Royalty"). No later than two days prior to a Unit's closing, a Settlement Statement or Settlement Disclosure Form, reflecting the applicable Technology Royalty payment for such Unit, shall be provided to Franchisor.
If, in strict accordance with the terms of the Franchise Agreement, Franchisee requests any change or modification to the Development System in connection
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, franchisees are obligated to remit payment for Higharc Services. Upon the execution of the addendum, the franchisee gains the right to access and use Higharc Services, adhering to the terms outlined in both the addendum and the Franchise Agreement. Epcon Communities will then collaborate with the franchisee to implement Higharc Services specifically for project development and unit sales.
For each unit sold within the project, the franchisee must remit $1,500 to Epcon Communities as a "Technology Royalty." This payment is due contemporaneously with the closing of the sale of each unit. To ensure timely payment, the franchisee must provide Epcon Communities with a Settlement Statement or Settlement Disclosure Form, reflecting the Technology Royalty payment, no later than two days prior to the unit's closing.
Additionally, if the franchisee requests changes or modifications to the Development System plans to meet local zoning or building code requirements, and Epcon Communities approves these changes in writing, Higharc will make the necessary adjustments. In this case, the franchisee is obligated to pay Epcon Communities $200 per hour for Higharc's services related to these changes. Payment is due within ten business days of the invoice date, with all services billed in minimum one-hour increments. It's important to note that the franchisee's obligation to pay the Technology Royalty continues even if their right to use Higharc Services is suspended or revoked due to non-compliance, until all amounts owed are paid in full.