Does Epcon Communities require franchisees to participate in a home warranty program?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
l receive a copy of the survey reports, which are intended to communicate to you areas in which you need to improve.
Home Warranty
We can require you to participate in a home warranty program that requires you to purchase insurance for the Units you sell in your project to cover defects and deficiencies in workmanship for one year and structural defects and deficiencies for ten years. You must purchase the home warranty from a third-party provider designated by us. You must meet the underwriting requirements established from time to time by the provider. In addition to the cost of the home warranty for each Unit, which is estimated to range from $925 to $1,500 per Unit, you may be required by the third-party provider to pay a one-time enrollment fee for each of your Projects. We estimate the enrollment fee to be $95. You must obtain the home warranty plan for each Unit prior to closing on the sale of
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 32–35)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, Epcon Communities has the option to require franchisees to participate in a home warranty program. This program would necessitate franchisees to purchase insurance for each unit sold within their project. This insurance would cover defects and deficiencies in workmanship for one year, and structural defects and deficiencies for ten years. The home warranty must be purchased from a third-party provider designated by Epcon Communities, and franchisees must adhere to the underwriting requirements set by this provider.
In addition to the cost of the home warranty itself, which is estimated to range from $925 to $1,500 per unit, the third-party provider may also require franchisees to pay a one-time enrollment fee for each project, estimated at $95. Franchisees are obligated to secure the home warranty plan for each unit before closing the sale, including gathering all necessary information and documentation required by the warranty plan issuer.
This requirement, if enforced, has significant financial implications for Epcon Communities franchisees. The cost of the home warranty, combined with the potential enrollment fee, adds to the overall expenses of each project. Franchisees need to factor these costs into their pricing and financial projections. Furthermore, compliance with the third-party provider's underwriting requirements is essential to ensure eligibility for the home warranty program. Franchisees should clarify with Epcon Communities the specific criteria and providers involved to accurately assess the financial impact and operational requirements of this potential mandate.