When purchasing developed lots for an Epcon Communities project, what cost should be budgeted for due diligence?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 3.A: Due Diligence and Land Entitlement for Developed Lots:
A nominal cost should be budgeted for due diligence when you are purchasing developed lots for your project. The land developer or seller of the developed lots can usually provide documentation for the prior due diligence that was completed by the land developer or seller in connection with its purchase and development of the lots. However, there may be approvals that require further research or procurement by you.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 22–32)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, when purchasing developed lots, a franchisee should budget a nominal cost for due diligence. The land developer or seller typically provides documentation from their prior due diligence. However, the franchisee may need to conduct further research or obtain additional approvals, which would incur costs.
Due diligence is a critical process to ensure the property is suitable for the Epcon Communities project. It involves examining and inspecting the property, including title conditions, physical conditions, fees, permits, and processes required by governmental agencies. Market studies and geotechnical borings may also be necessary to test soil suitability, along with architectural work to prepare prototype plans.
Franchisees should be aware that additional zoning approval from an architectural review board or committee might be needed to use specific products, plans, and materials that are part of Epcon Communities' Development System. Obtaining these zoning approvals can increase project costs. Therefore, even when purchasing developed lots, it's essential to allocate funds for potential due diligence expenses to ensure compliance and project suitability.