What is the timing of the Epcon Communities franchisee's payment for the use of Higharc Services?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
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Franchisee acknowledges that Franchisor may, in its sole discretion, suspend, limit or revoke a Franchisee's right to use the Higharc Services if Franchisor determines that Franchisee, its agents, employees or owners, have failed to comply with the requirements and obligations pertaining to the Higharc Services. Notwithstanding any such suspension, limitation or revocation described above, the obligations of Franchisee to pay the Technology Royalty under this Addendum will continue without reduction until such time as all amounts owed by Franchisee to Franchisor under the terms of this Addendum are indefeasibly paid in full.
In consideration for use of the Higharc Services, commencing with the date of execution of this Addendum, contemporaneously with the closing of the sale of each Unit in the Project, Franchisee shall remit (or have the escrow agent, attorney, or any other person conducting closings remit) a payment to Franchisor in an amount equal to One-Thousand Five Hundred No/100 Dollars ($1,500.00) (the "Technology Royalty"). No later than two days prior to a Unit's closing, a Settlement Statement or Settlement Disclosure Form, reflecting the applicable Technology Royalty payment for such Unit, shall be provided to Franchisor.
If, in strict accordance with the terms of the Franchise Agreement, Franchisee requests any change or modification to the Development System in connection
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, a franchisee is required to remit payment for the use of Higharc Services contemporaneously with the closing of each unit sale within their project. This payment, referred to as the "Technology Royalty," amounts to $1,500.00 for each unit. The franchisee is responsible for ensuring that the franchisor receives a Settlement Statement or Settlement Disclosure Form, reflecting the Technology Royalty payment for the unit, no later than two days prior to the unit's closing.
In addition to the Technology Royalty, if a franchisee requests changes or modifications to the Development System plans to meet local zoning or building code requirements, and Epcon Communities approves these changes in writing, the franchisee will incur additional costs. Higharc will make these modifications, and the franchisee will be obligated to pay Epcon Communities $200.00 per hour for Higharc's services. These payments are due within ten business days of the invoice date, with a minimum billing increment of one hour for services rendered.
This payment structure means that franchisees must carefully manage their project finances, ensuring that the Technology Royalty is factored into the sale price of each unit and that the necessary documentation is provided to Epcon Communities in a timely manner. Furthermore, any modifications to the standard plans can result in significant additional expenses, so franchisees should thoroughly research local requirements and plan accordingly to minimize these costs. The franchisee should also be aware that the obligation to pay the Technology Royalty continues even if the right to use Higharc Services is suspended, limited, or revoked, until all amounts owed are paid in full.