Does Epcon Communities have any restrictions on assigning its contract?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
rtain important provisions of the franchise and related agreements. You should read these provisions in the agreements attached to this disclosure document.**
Franchise Agreement
| Provision | Section of Sublicense Agree ment | Summary |
|---|---|---|
| i. Franchisee’s obligations on termination/non-renewal | Section 5 | Cease use and, if applicable, return to us, the Marks, Epcon Communities Works, Development System or systems or parts of the Development System; cancel recording of Sublicense Agreement in all governmental records. |
| j. Assignment of contract by | Not Applicable | No restrictions on our right to assign as long as our |
| franchisor | obligations are assumed upon assignment. | |
| k. “Transfer” by franchisee -- | Section 1 | Transfer includes any transfer of the rights granted under |
| defined | the Sublicense Agreement. | |
| l. Franchisor approval of a | Not applicable | Not Applicable. |
| transfer by franchisee | ||
| m. Conditions for franchisor’s | Section 1 | Not Applicable. |
| approval of a transfer | ||
| n. Franchisor’s right of first | Not Applicable | Not Applicable. |
| refusal to acquire | ||
| franchisee’s business | ||
| o. Franchisor’s option to | Not Applicable | Not Applicable. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 55–69)
What This Means (2025 FDD)
According to the 2025 FDD, Epcon Communities has different policies regarding assignment of contracts depending on the specific agreement. For the Sublicense Agreement, Epcon Communities, as the franchisor, faces no restrictions on assigning the contract as long as its obligations are assumed upon assignment. This means Epcon Communities can transfer the agreement to another party, provided that party takes on Epcon Communities' responsibilities. However, the Market Hold Agreement states that it is not assignable by the franchisee to any other party without Epcon Communities' consent.
For a prospective Epcon Communities franchisee, this means they cannot transfer their Market Hold Agreement to someone else without first getting approval from Epcon Communities. This is a fairly standard practice in franchising, as franchisors typically want to control who their franchisees are. The Sublicense Agreement outlines the obligations of both parties upon termination or non-renewal, including ceasing the use of Epcon Communities' marks and development systems, and canceling the recording of the Sublicense Agreement in governmental records.
It is important for a potential Epcon Communities franchisee to understand the terms of each agreement they enter into, as the ability to assign the contract can have significant implications. For instance, if a franchisee wants to sell their business, the restrictions on transferring the Market Hold Agreement could affect the sale. The FDD also specifies that transfer includes any transfer of the rights granted under the Sublicense Agreement.
Overall, while Epcon Communities retains the freedom to assign its contracts under the Sublicense Agreement, franchisees are restricted from assigning the Market Hold Agreement without franchisor approval. This is a common arrangement designed to protect the franchisor's interests and maintain control over the franchise system.