Is there an exception to the restriction on the Epcon Communities franchisee's involvement in real estate development projects?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.6 Franchisee shall not, during the term of this Agreement, without the prior written consent of Franchisor, directly or indirectly, either as a principal, agent, employee, officer, director or member of any corporation or other business entity, as a partner or sole proprietor, or in any other way, own, develop, construct or have any interest in any real estate development project that is age-restricted or for which the targeted buyers are the 55+ home buyer, and includes, without limitation, detached and/or attached ranch-style homes (with or without basements or a second floor) that are similar to the homes and communities depicted in Franchisor's Development System; provided however, this provision shall not apply to the involvement by Franchisee in the development of other Epcon Communities Projects by other franchisee business entities, or to any ownership by Franchisee of less than three percent (3%) of the outstanding stock of any publicly held corporation.
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, there are exceptions to the restriction preventing franchisees from engaging in real estate development projects that target the 55+ home buyer demographic or involve age-restricted communities with housing similar to Epcon Communities' designs.
Specifically, this restriction does not apply if the franchisee is involved in the development of other Epcon Communities projects through other franchisee business entities. This means an Epcon Communities franchisee can participate in other Epcon Communities projects without violating the agreement, as long as it's done through a separate business entity that is also an Epcon Communities franchisee.
Another exception is if the franchisee owns less than three percent (3%) of the outstanding stock of any publicly held corporation. This allows franchisees to hold minor investments in publicly traded companies that may be involved in similar real estate development without breaching the franchise agreement. However, any ownership stake of 3% or greater would likely violate the agreement.