Under what conditions would an Epcon Communities franchisee not be eligible for volume-based reductions to Point of Closing Royalty Payments?

According to Epcon Communities' 2025 Franchise Disclosure Document, a franchisee will not be eligible for volume-based reductions to Point of Closing Royalty Payments if they violate the terms of their Franchise Agreement relating to the transfer of their franchise or ownership interest in their business entity.

This means that if an Epcon Communities franchisee attempts to transfer their franchise or ownership interest in a way that breaches the Franchise Agreement, they will lose the opportunity to reduce their royalty payments based on the volume of units they sell. The Point of Closing Royalty Payment is due each time a franchisee closes on the sale of a unit in their project. The amount of the payment is determined by multiplying the Applicable Percentage by the gross sales price of the unit closed, but will not be less than $3,000 per unit.

This condition incentivizes franchisees to adhere strictly to the terms outlined in the Franchise Agreement regarding transfers, ensuring that Epcon Communities maintains control over who operates under its brand and how the franchise changes hands. For a prospective franchisee, this highlights the importance of understanding and complying with all transfer-related clauses in the Franchise Agreement to avoid losing potential royalty reductions.