What rights of the franchisee under the Franchise Agreement are NOT included in the Assignment to the Assignee for Epcon Communities?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignor hereby expressly grants, bargains, sells, conveys, transfers and assigns to Assignee such of Assignor's right, title and interest in and to the Franchise Agreement and the Market Area Agreement (copies of which are attached hereto, made a part hereof and marked as Exhibit "A"), and the license granted thereunder, which may be necessary to permit Assignee to complete any Project which is the subject thereof upon the default or occurrence of an event of default by Assignor under any of the Loan Agreements (hereinafter, the "Assignment"). The Assignment shall not include the rights of the franchisee provided under Sections 3.4 of the Franchise Agreement.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, specifically Item 23, the assignment of the Franchise Agreement and Market Area Agreement to an Assignee does not include all rights of the franchisee. The assignment explicitly excludes the rights of the franchisee as provided under Section 3.4 of the Franchise Agreement.
This means that if a franchisee's rights are assigned to another party (Assignee) due to default or an event of default under loan agreements, the Assignee does not automatically assume all the rights the original franchisee had. Section 3.4 of the Franchise Agreement contains specific rights that are retained by the original franchisee and not transferred in the assignment.
For a prospective Epcon Communities franchisee, this is an important consideration. If their franchise rights are ever assigned to a third party, they will need to understand exactly which rights are being transferred and which are being retained, as specified in Section 3.4 of the Franchise Agreement. It would be prudent to review Section 3.4 carefully to understand the implications of such an assignment.