What obligations of the Franchisee under the Franchise Agreement does the Sublicensee assume in relation to the Epcon Communities project?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Acceptance of Sublicense and Assumption of the Obligations. Sublicensee hereby accepts the sublicense described in Section 1 hereof and, as of the date hereof, assumes, and agrees to be bound by, all of Franchisee's obligations under the Franchise Agreement and any related agreements as such obligations relate to the Epcon Communities project developed by Sublicensee.
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- **ACKNOWLEDGMENT OF EXISTENCE OF THIRD-PARTY BENEFICIARY OF THIS AGREEMENT, EPCON COMMUNITIES FRANCHISING, LLC.
FRANCHISEE AND SUBLICENSEE ACKNOWLEDGE AND AGREE THAT EACH CONTEMPLATES AND INTENDS THAT: (A) THIS AGREEMENT AND ITS SPECIFIC PROVISIONS ARE INTENDED DIRECTLY AND PRIMARILY TO BENEFIT FRANCHISOR, AND FRANCHISOR IS INTENDED TO BE, AND SHALL BE, A THIRD-PARTY BENEFICIARY OF THIS AGREEMENT; (B) SUBLICENSEE, IN EXECUTING THIS AGREEMENT, SHALL ASSUME A DIRECT OBLIGATION TO FRANCHISOR, AS SUCH THIRD-PARTY BENEFICIARY, TO PERFORM CERTAIN OF FRANCHISEE'S OBLIGATIONS UNDER THE FRANCHISE AGREEMENT; AND (C) FRANCHISOR, AS SUCH THIRD-PARTY BENEFICIARY, SHALL BE CONFERRED WITH THE RIGHTS, IN ITS SOLE DISCRETION, TO ITSELF TAKE ANY ACTION OR PURSUE ANY REMEDY THAT IT DEEMS NECESSARY IN ORDER TO ENFORCE THE PROVISIONS HEREOF OR OF THE FRANCHISE AGREEMENT AND TO WHICH IT WOULD BE ENTITLED AS A PARTY ENFORCING THIS AGREEMENT.
FRANCHISOR SHALL BE ENTITLED TO ANY REMEDIES AVAILABLE AT LAW, IN EQUITY, OR PROVIDED IN THE FRANCHISE AGREEMENT FOR ANY BREACH BY SUBLICENSEE OF ANY PROVISION HEREOF OR OF ANY MARKET AREA AGREEMENT.**
Sublicensee shall notify Franchisee and Franchisor of any unauthorized use of the Development System, Epcon Communities Works or the Marks by third parties promptly as it comes to Sublicensee's attention.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, a Sublicensee assumes the Franchisee's obligations under the Franchise Agreement as they relate to the specific Epcon Communities project they are developing. Specifically, the Sublicensee agrees to be bound by all of the Franchisee's obligations under the Franchise Agreement and any related agreements pertaining to the Epcon Communities project they are undertaking. This indicates that the Sublicensee is stepping into the shoes of the Franchisee for the limited scope of that particular project.
However, this assumption of obligations does not extend to all aspects of the Franchise Agreement. The grant of the Sublicense does not include the rights to, or the imposition of obligations upon, Franchisee provided under Sections 3.4 or 4.1 of the Franchise Agreement. Additionally, Article 21 of the Franchise Agreement is not included in the sublicense. This means that certain rights and obligations remain solely with the Franchisee, even as the Sublicensee takes on responsibility for the project's development. The Franchise Agreement remains in full force and effect for the Franchisee even after the Sublicense Agreement is executed, except for the specific obligations assumed by the Sublicensee.
Epcon Communities Franchising, LLC is a third-party beneficiary, so the Sublicensee has a direct obligation to Epcon Communities to perform certain of the Franchisee's obligations under the Franchise Agreement. Epcon Communities has the right to take action or pursue remedies to enforce the provisions of the Sublicense Agreement or the Franchise Agreement. This arrangement ensures that Epcon Communities retains control and can enforce compliance with its standards and requirements, even when a project is being managed by a Sublicensee. The Sublicensee must also notify both the Franchisee and Epcon Communities of any unauthorized use of the Development System, Epcon Communities Works, or the Marks by third parties.