When does the obligation to pay the Minimum Monthly Royalty begin for an Epcon Communities franchise?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
ce with a then-existing Franchise Agreement with us, and (b) if applicable, is in a state in which Franchisor has an effective registration of its Franchise Disclosure Document or has an effective franchise registration exemption.
5.2 In addition to the Initial Franchise Fee, Franchisee agrees to pay to Franchisor each of the following nonrefundable fees:
(a) Minimum Monthly Royalty: For each month during the term of this Agreement for which a Project is Under Development (as defined below), and for which Franchisee did not close on the sale of a Unit in the preceding month, Franchisee shall pay Franchisor a minimum monthly royalty (the "Minimum Monthly Royalty") on or before the fifteenth (15th) day of the month in the amount of Two Thousand Dollars ($2,000.00). Franchisee's obligation to pay the Minimum Monthly Royalty shall begin on the earlier of (i) the fifteenth day of the month for the month that is the thirtyseventh (37th) from the Effective Date of this Agreement, or (ii) the fifteenth (15th) day of the month immediately following the month in which there is the first closing of a sale of a Unit in the Project.
For purposes of this Agreement, a Project is deemed to be "Under Development" during the
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, the obligation to pay the Minimum Monthly Royalty begins on the earlier of two dates. The first possible start date is the fifteenth day of the month that is 37 months from the Effective Date of the Franchise Agreement. The second possible start date is the fifteenth day of the month immediately following the month in which there is the first closing of a sale of a Unit in the Project.
For each month during the term of the agreement for which a project is under development and for which the franchisee did not close on the sale of a unit in the preceding month, the franchisee must pay Epcon Communities a minimum monthly royalty. This royalty is due on or before the fifteenth of the month and amounts to $2,000.00.
A project is considered "Under Development" starting when the Minimum Monthly Royalty is required to be paid and continues until the earlier of when the project is completed as per Section 11.1 of the agreement, or when the franchisee's license to use the Development System for the project is terminated.