Are there any exceptions to the restriction on Epcon Communities franchisees owning or developing age-restricted real estate?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
The undersigned agrees that it shall not, during the term of Franchise Agreement, without the prior written consent of Epcon Communities Franchising, LLC, 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 agerestricted or for which the targeted buyers are the 55+ home buyer, and includes, but is not limited to, 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 Epcon Communities Franchising, LLC's Development System; provided however, this provision shall not apply to the involvement by the undersigned in the development of other Epcon Communities Projects by other franchisee business entities, or to any ownership by the undersigned of less than three percent (3%) of the outstanding stock of any publicly held corporation.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD page 55)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, franchisees are generally restricted from owning, developing, or having an interest in age-restricted real estate projects or those targeting the 55+ home buyer demographic during the term of their Franchise Agreement. This restriction includes detached and/or attached ranch-style homes similar to those in Epcon Communities' Development System. However, there are specific exceptions to this rule.
One exception allows franchisees to be involved in the development of other Epcon Communities projects through other franchisee business entities. This means a franchisee can participate in age-restricted developments if it's done in conjunction with another Epcon Communities franchisee. Another exception is if the franchisee owns less than three percent (3%) of the outstanding stock of any publicly held corporation involved in such developments. This allows for minor investment in larger, publicly traded companies that may have age-restricted real estate projects.
It's important to note that obtaining prior written consent from Epcon Communities Franchising, LLC can also provide an exception to this restriction. This suggests that franchisees can seek approval from Epcon Communities to engage in age-restricted real estate projects on a case-by-case basis. These restrictions apply not only to the franchisee but also to any officer, director, shareholder, member, or holder of an ownership interest in the franchisee, if the franchisee is a corporation, limited liability company, or other business entity, and any partner of the franchisee, if the franchisee is a partnership.