What obligations are parties bound by when signing the Personal Covenants and Agreement for an Epcon Communities franchise?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
project, however, we recommend that you or at least one of the owners of the franchise business entity directly participate in the development and construction of your project.
If you form a business entity to own and operate your franchised business, your principals, officers, owners, directors, investors and/or partners must each sign the Personal Covenants and Agreement document attached as Exhibit E to this disclosure document. If your spouse is a principal, officer, owner, director, investor or partner in your business entity, your spouse must also sign the Personal Covenants and Agreement document. Signing this document obligates the party signing to be personally bound by the payment and other obligations of the Franchise Agreement, including those concerning confidentiality and non-disclosure, completion of project(s), and non-competition.
If you form a business entity to own and operate your franchised business, the principal owners of the business entity must personally guarantee the obligations of the business entity under the Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 54–55)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, the Personal Covenants and Agreement places specific obligations on principals, officers, owners, directors, investors, and partners of a franchisee's business entity, as well as potentially their spouses, and certain managers and employees. By signing this agreement, these individuals agree to be personally bound by various obligations outlined in the Franchise Agreement. These obligations include those concerning confidentiality and non-disclosure, completion of project(s), and non-competition. This ensures that key individuals associated with the franchisee are held accountable for upholding critical aspects of the franchise agreement.
Specifically, individuals signing the Personal Covenants and Agreement agree not to disclose confidential information about the Epcon Communities Development System to third parties or use it for their own benefit. They acknowledge that the Development System is the exclusive property of Epcon Communities Franchising, LLC, and agree not to use it outside the terms of the Franchise Agreement. This is to protect Epcon Communities' proprietary information and maintain the integrity of its business model.
The document also states that Epcon Communities Franchising, LLC can seek injunctions and specific performance orders against signatories who breach their obligations under the Personal Covenants and Agreement. This means that if someone violates the agreement, Epcon Communities can take legal action to stop the violation and enforce compliance. The agreement is governed by the laws of Ohio, where Epcon Communities Franchising, LLC is based, without regard to its conflict of laws principles, and becomes effective upon acceptance by Epcon Communities Franchising, LLC in Ohio.
Furthermore, the liability of Epcon Communities Franchising, LLC to the undersigned is limited to an amount equal to the Initial Franchise Fee paid by the franchisee, multiplied by the individual's percentage ownership of the franchisee. The document also includes a waiver of claims for consequential, incidental, special, or exemplary damages against Epcon Communities Franchising, LLC and its affiliates. This limits the potential financial exposure of Epcon Communities in case of disputes.