When purchasing raw land for an Epcon Communities project, what responsibilities does the franchisee assume?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 1.A: Purchase of Raw Land:
Currently, franchisees typically purchase raw land from a third-party seller to develop their project. Expenses incurred in connection with this purchase include the cost of land and some, or all, of the following costs: settlement and closing fees, title search/binder/insurance, attorney fees, and/or any costs customarily the responsibility of the buyer in your local market. When purchasing raw land, you become responsible for the due diligence, entitlement, zoning, permitting, horizontal construction (land development, streets, and underground utilities) and the site improvements that will benefit the proposed community being constructed.
Note 4.A. Land Development and Site Improvements for Raw Land:
If you purchase raw land and develop the lots for your project yourself, your upfront costs for land development and site improvements will be significantly higher than if you purchase developed lots for your project.
Note 4: Land Development and Site Improvements Generally
Land development expenses encompass all horizontal construction costs that are required to bring entitled raw land to a point where Units and other amenities are permitted to be constructed. These costs typically include conceptual site plans, all materials, labor, hard and soft costs, fees, permits, plan reviews, inspections, testing, bonds, letters of credit, site plans, erosion and stormwater control measures, demolition of existing structures, temporary access to the site, clearing, mass excavation, retaining walls, temporary and permanent utility services, streets, roadways, sub-base and base, curbs and underdrains, street lighting and signage, fencing and any other facilities or work that is required to complete the land development. Any necessary off-site improvements that may be required to accommodate the on-site improvements are also considered a cost of land development.
Site improvement expenses are those related to all commonly owned land and amenities that are intended to benefit the entire community, and not just a single Unit owner. These expenses typically include items such as required permits, fees, entry feature(s), landscaping and earth mounding of common areas, landscape and hardscape, signage, common area fixtures and community mail kiosks.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 22–32)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, franchisees who purchase raw land for development are responsible for a range of tasks and expenses. These responsibilities include due diligence, entitlement, zoning, and permitting processes. Franchisees also handle horizontal construction, which involves land development, streets, and underground utilities. Additionally, they are in charge of site improvements that benefit the community being constructed.
Specifically, the expenses associated with purchasing raw land may encompass the land cost itself, along with settlement and closing fees, title search, binder and insurance costs, attorney fees, and other expenses typically borne by the buyer in the local market. This means franchisees need to be prepared for a potentially significant upfront investment that goes beyond just the land acquisition.
Furthermore, franchisees should be aware that upfront costs for land development and site improvements will be significantly higher when purchasing raw land compared to purchasing developed lots. Land development expenses include conceptual site plans, materials, labor, hard and soft costs, fees, permits, plan reviews, inspections, testing, bonds, letters of credit, site plans, erosion and stormwater control measures, demolition of existing structures, temporary access to the site, clearing, mass excavation, retaining walls, temporary and permanent utility services, streets, roadways, sub-base and base, curbs and underdrains, street lighting and signage, fencing and any other facilities or work that is required to complete the land development. Site improvement expenses include permits, fees, entry features, landscaping and earth mounding of common areas, landscape and hardscape, signage, common area fixtures and community mail kiosks.
Given these extensive responsibilities and costs, Epcon Communities advises prospective franchisees to consult with an attorney and an accountant to fully understand the real estate purchase and development processes, as well as the associated costs and risks in their specific market. Securing trade contractor and supplier agreements is also recommended to more accurately determine project costs.