What must a transferee franchisee do regarding the existing obligations of the Epcon Communities franchise agreement?
Epcon_Communities Franchise · 2025 FDDAnswer from 2025 FDD Document
ut the prior written consent of Franchisor. Such transfer, sale, assignment, pledge or encumbrance not having the written consent of Franchisor shall be null and void and shall constitute a material breach of this Agreement, for which Franchisor may then terminate this Agreement. Franchisor's consent shall not be required for any Unit sold to third parties in the ordinary course of Franchisee's business. Franchisor shall not unreasonably withhold its consent to a transfer of any interest in Franchisee or in this Epcon Communities franchise, provided, however, that prior to the time of transfer, Franchisor may, in its sole discretion, require that:
- (a) All of Franchisee's accrued monetary obligations to Franchisor and all other outstanding obligations related to the business franchised hereunder shall have been satisfied, or will be satisfied through the transfer;
- (b) The transferor's right to receive compensation, pursuant to any agreement or agreements for the purchase of any interest in Franchisee or in the business franchised hereunder, shall be subordinate and secondary to Franchisor's rights to receive any outstanding monetary obligation or other outstanding obligations due from transferor or Franchisee pursuant to this Agreement, and whether arising before or after the transfer;
- (c) Franchisee shall have executed a general release in a form satisfactory to Franchisor, effective as of the date of transfer, of any and all claims against Franchisor and its officers, directors, shareholders, and employees in their corporate and individual capacities, including, without limitation, claims arising under federal, state and local laws, rules and ordinances.
- (d) The transferee franchisee shall enter into a written assumption, in a form satisfactory to Franchisor, assuming and agreeing to discharge all of Franchisee's obligations under this Agreement prior to and after the date of the assumption;
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to the 2025 Epcon Communities Franchise Disclosure Document, a transferee franchisee must enter into a written agreement, in a form satisfactory to Epcon Communities, assuming and agreeing to discharge all of the transferring franchisee's obligations under the Franchise Agreement both before and after the date of the assumption. This means the new franchisee takes on all responsibilities and liabilities of the previous franchisee as if they were the original party to the agreement.
Prior to the transfer, Epcon Communities may require that all of the transferring franchisee's accrued monetary obligations and other outstanding obligations related to the franchised business be satisfied or will be satisfied through the transfer. The transferor's right to receive compensation for the purchase of any interest in the franchise must be subordinate and secondary to Epcon Communities' rights to receive any outstanding monetary obligation. The transferring franchisee must also execute a general release of any and all claims against Epcon Communities and its officers, directors, shareholders, and employees.
In addition to assuming the obligations of the franchise agreement, the transferee franchisee must execute the then-current standard form of the Epcon Communities Franchise Agreement and other ancillary agreements as Epcon Communities may require. The term of this new agreement will end as provided in Section 3.1 of the agreement. The transferee franchisee must also complete each of the initial training sessions then in effect for new franchisees at their own expense and under terms and conditions that Epcon Communities may reasonably require.