When transferring an Epcon Communities franchise, does the general release required from the franchisee include claims arising under local ordinances?
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
Source: Item 23 — RECEIPTS (FDD pages 86–280)
What This Means (2025 FDD)
According to Epcon Communities' 2025 Franchise Disclosure Document, when transferring a franchise, Epcon Communities requires the franchisee to execute a general release of claims against the franchisor. This release includes, without limitation, claims arising under federal, state, and local laws, rules, and ordinances. This means that the franchisee gives up the right to sue Epcon Communities for any reason, including violations of local ordinances, upon transferring the franchise.
However, there are exceptions to this general release for franchisees governed by specific state laws. For example, the addendum for Maryland states that the general release will not apply to any claims under the Maryland Franchise Laws. Similarly, in Rhode Island, the release does not cover liabilities imposed by the Rhode Island Franchise Investment Act, except for releases given in connection with the settlement of disputes, claims, or civil lawsuits arising under that Act. Indiana franchisees are not required to release any claims against Epcon Communities arising under Indiana franchise law. Minnesota rules also prohibit requiring a franchisee to assent to a release that would relieve any person from liability imposed by Minnesota Statutes, Sections 80C.01 to 80C.22; however, this does not bar the voluntary settlement of disputes.
These stipulations and exceptions highlight the importance of franchisees understanding the specific legal protections afforded to them by their state's franchise laws. Prospective franchisees should consult with a legal professional to fully understand the implications of the general release and how it interacts with their rights under applicable state laws before signing the franchise agreement.