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D74/100FDD 2025

Epcon Communities — Litigation & Risk

Real Estate · FDD Items 3, 4 & 5

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Moderate — Review

5 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
5
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
74 / 100
FranchiseVerdict composite
Rating
CAUTION
STRONG / MODERATE / CAUTION / AVOID

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
No
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Ohio
State whose law governs disputes — relevant if you're not based there

What drove the 74/100 rating

Risk Score Breakdown

  1. 01HIGHGoing Concern status is FALSE — indicates potential financial instability or solvency concerns at corporate level
  2. 02HIGHMultiple active litigation cases including Fair Housing Act violation with Consent Decree — regulatory compliance risk and reputational damage
  3. 03MEDNo average net income disclosed — impossible to validate actual profitability despite $598,881 average revenue claim
  4. 04MINORHigh investment range ($1.15M–$5.7M) with only 101 units and 13.7% YoY growth — suggests slow unit expansion and extended payback periods
  5. 05MINORRoyalty structure ($3,000 minimum monthly) creates fixed cost burden regardless of actual sales performance
  6. 06HIGHConstruction defect litigation across multiple projects (Price, Marrington Villas, Lipari) indicates systemic quality/delivery issues

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.