How much does an Epcon Communities franchise cost?
For a 30-Unit detached-home Epcon Communities project, the 2026 Franchise Disclosure Document gives two different Estimated Initial Investment ranges. A project that buys raw land and develops the lots is estimated at $3,845,350 to $6,398,350. A project that buys developed lots is estimated at $1,208,600 to $1,935,850. These are separate land-acquisition structures, not low and high versions of one interchangeable format.
The 2026 Item 7 ranges must be read separately. The developed-lot scenario assumes a third-party land developer has handled horizontal development; the raw-land scenario includes entitlement, lot development and site improvements. Each total already includes the Initial Franchise Fee, Initial Marketing Program Membership Fee and three months of Additional Funds.
Scale: $0 to $6.4 million. The bars show the disclosed low-to-high range, not an average or recommended budget.
Interpretation: the principal structural difference is whether the franchisee funds land entitlement, horizontal development and site improvements directly. Source: 2026 FDD, Item 7, pp. 15–25.
Why are there two Item 7 investment ranges?
The two ranges reflect different real-estate responsibilities. In the raw-land scenario, the franchisee buys land, completes due diligence and entitlement, develops the lots and funds the project infrastructure. In the developed-lot scenario, a third-party land developer has generally handled zoning, entitlement, horizontal development and much of the permitting before the franchisee purchases the lots.
Raw-land structure
Item 7 separately budgets Land Purchase, Financing Costs for Land Acquisition and Land Development, Due Diligence and Land Entitlement, Land Development and Site Improvements, and a Large Pavilion Community Amenity. The table assumes 30 detached Units and direct development of the lots.
Developed-lot structure
Item 7 budgets the purchase of two developed lots plus a deposit securing an exclusive purchase agreement for the 30-Unit project and community amenity. Land Development and Site Improvements and the Large Pavilion are shown as $0 because those costs are generally embedded in the lot-purchase arrangement.
| Land and infrastructure category | Raw-land project | Developed-lot project |
|---|---|---|
| Land or lot acquisition | $900,000–$1,700,000 | $209,000–$297,000 for two lots |
| Exclusive purchase-agreement deposit | Not separately listed | $156,750–$445,500 |
| Due diligence and land entitlement | $42,500–$390,000 | $5,000–$10,000 |
| Land development and site improvements | $1,985,000–$2,825,000 | $0 |
| Large Pavilion Community Amenity | $80,000–$100,000 | $0 as a separate line |
| Financing costs during the initial period | $0–$200,000 | Not separately listed |
Maximum-only comparison for the 30-Unit raw-land scenario. The scale runs from $0 to $2,825,000.
Interpretation: the raw-land high end is dominated by horizontal development and land acquisition, not by the franchise fee. Values are official category maximums, not additive projections. Source: 2026 FDD, Item 7, pp. 15–16.
The $75,000 Initial Franchise Fee is only one component of a real-estate development project. The largest disclosed variables are land, entitlement, site conditions, infrastructure, local construction costs and financing. A buyer should not treat the franchise fee as the cash required to start the project.
What does the initial investment cover?
Both 2026 Item 7 scenarios include construction of a Model Home Unit and the first Unit offered for sale, upfront sales and marketing, a salaried training period for one in-house sales consultant, direct and indirect project costs, initial franchise payments, training travel, optional BuildTopia licenses and Additional Funds. The totals cover an initial investment period beginning at Franchise Agreement signing and extending through site work, construction of the first two Units and an initial three-month operating period.
Construction, marketing and project overhead
| Item 7 category | Disclosed amount | Applies to |
|---|---|---|
| Vertical Construction Costs for Model Home Unit | $246,800–$393,750 | Both land strategies |
| Vertical Construction Costs for First Unit Offered for Sale | $246,800–$393,750 | Both land strategies |
| Upfront Sales and Marketing | $141,000–$161,000 | Both land strategies |
| Training Salary for In-House Sales Consultant | $26,000 | One consultant at $1,000 weekly for 26 weeks |
| Direct and Indirect / Overhead Project Costs | $72,000–$82,500 | Both land strategies |
Initial franchisor and startup payments
| Payment | Amount in Item 7 | Payment timing or basis |
|---|---|---|
| Initial Franchise Fee | $75,000 | At Franchise Agreement signing |
| Initial Marketing Program Membership Fee | $5,000 | At Franchise Agreement signing |
| Mortgage and Security Agreement Recording and Administrative Fee | $300–$1,200 | At financing closing or within 15 days of invoicing |
| Marketing Program Fee during Item 7 period | $3,750 | Installments, monthly by the 15th |
| Initial Training Program travel and meals | $2,000–$3,000 | On demand; no current training tuition fee |
| BuildTopia Software License | $2,700–$5,400 | One or two optional licenses during the initial period |
| Additional Funds for three months | $16,500–$33,000 | Varies during the initial operating period |
Can an existing franchisee pay a different initial fee?
Yes, but only under the conditions stated in Item 5. A current franchisee developing an additional project may pay a $5,000 Initial Franchise Fee when at least 50% of the ownership is the same, the new project is within 100 miles of an active project and any required state registration condition is met. Under the franchisor's current policy, a newly formed project entity with at least 80% of the existing franchisee's owners may owe no Initial Franchise Fee if the franchisor consents. Conversely, a transfer of more than 20% of the original ownership to a third party can trigger the then-applicable Initial Franchise Fee. An existing franchisee in good standing may also be exempt from the $5,000 Initial Marketing Program Membership Fee when its existing Franchise Agreement was signed before May 1, 2023 and remains effective, or when it already paid that membership fee under the existing agreement.
Source: 2026 FDD, Item 5, p. 8.Additional Funds are not an extra amount to add to the Item 7 total. The $16,500 to $33,000 estimate is already included. It covers organization, entity formation, professional services and land-search costs during the initial period, but the FDD says it excludes owner distributions and employee salaries.
When is the money paid?
The cash requirement is staged over a long real-estate development cycle. Item 7 assumes work begins immediately after Franchise Agreement signing and, for both land strategies, a Model Home Unit opens around month 24. The timing below summarizes disclosed milestones; actual land contracts, lender draws and contractor schedules remain project-specific.
Franchise Agreement signing
Pay the $75,000 Initial Franchise Fee and $5,000 Initial Marketing Program Membership Fee. If the buyer already owns the project property, the required mortgage must be delivered for recording no later than 30 days after signing.
Site control and due diligence
Item 7 assumes a contingent land or lot-purchase agreement during the first three months, followed by due diligence, market study, plan work, engineering and approvals. Deposits and third-party professional costs are paid as arranged.
Property closing and security recording
For newly acquired property, the minimum $200,000 mortgage securing fees owed to the franchisor must be recordable within 15 days after the property closing. Recording, legal and administrative costs are reimbursed at financing closing or after invoicing.
Development, model construction and marketing
The raw-land assumptions begin horizontal development around month 16 and construction of the amenity, Model Home Unit and first sale Unit around month 20. Marketing Program Fees begin at the earliest applicable trigger: the eighteenth month after the month of signing, the month immediately after the franchisee requests website inclusion, or the month immediately after the first Unit closing.
Unit closings and ongoing payments
A Point of Closing Royalty Payment is due at each Unit closing. The Minimum Monthly Royalty begins at the earlier of the month after the first closing or the thirty-seventh month after the month in which the Franchise Agreement was signed. Additional Funds in Item 7 cover the initial three-month operating period.
What fees continue after opening?
Epcon Communities uses both closing-based royalties and monthly minimum payments. The principal Royalty Fee is calculated from each Unit's disclosed gross sales price, while the Minimum Monthly Royalty applies in months without a preceding-month Unit closing. Marketing, technology, survey, warranty, training and event-triggered charges can also continue or arise during development.
Point of Closing Royalty schedule
| Units closed in a calendar year | Applicable percentage | Payment basis |
|---|---|---|
| 1–6 | 2.00% | Gross sales price of each Unit |
| 7–12 | 1.75% | Gross sales price of each Unit |
| 13–24 | 1.50% | Gross sales price of each Unit |
| 25–50 | 1.25% | Gross sales price of each Unit |
| 51 and more | 1.00% | Gross sales price of each Unit |
The disclosed gross sales price includes the real-property and personal-property sale price stated on the closing documents, including upgrades and additions less discounts or rebates. The franchisor may notify franchisees of a cap on the gross sales price used only for the royalty calculation; it does not currently impose a total annual cap on Point of Closing Royalty Payments.
Each Point of Closing Royalty Payment is at least $3,000 per Unit. A transfer-related violation can increase the calculation percentage to 3.5%. Source: 2026 FDD, Item 6, pp. 9 and 12–14.- Minimum Monthly Royalty
- $2,000 for a month when no Unit was closed in the preceding month; $0 when a Unit was closed in the preceding month; $5,000 after a transfer-related violation. Due by the 15th.
- Annual refund condition
- If Point of Closing Royalty Payments exceed $24,000 for the calendar year and the franchisee is not in default, Minimum Monthly Royalty payments for that year are refunded.
- Marketing Program Fee
- $625 per project per month for the first and second eligible concurrent projects, currently discounted to $500 for the third through fifth and $375 for the sixth and each additional project when the disclosed construction and active-marketing conditions are met. The discount may be discontinued, and the monthly fee may be raised to no more than 120% of the preceding year's monthly fee.
- Technology Royalty Fee
- $1,500 for each Unit sold if the franchisee signs the Technology Royalty Addendum and uses the recommended software; approved architectural-plan changes cost an additional $200 per hour.
Which charges depend on an event or operating choice?
Market Hold Fee: $5,000 for each approved market-area reservation. The fee is credited to amounts due under a Franchise Agreement signed before the hold expires.
National Conference: up to $2,000 per attendee, with current early-bird registration of $1,500; transportation and room and board are separate.
Additional training: estimated at $1,500 to $2,500 per person, plus attendee transportation and room and board.
Homeowner surveys: currently $200 once and $49 per survey. The FDD recommends one survey after closing and a follow-up six months later, and participation may become required.
Home warranty: if required, Item 8 estimates $925 to $1,500 per Unit plus a one-time $95 enrollment fee for each project.
Rebate Program: currently voluntary. The latest annual franchisee participation charges disclosed ranged from $82 to $12,515, including a 7.5% administrative fee and 2.5% accounting fee applied to rebate amounts.
Volume-based royalty reduction: the franchisor may rank franchisees using the prior three calendar years. Qualifying franchisees in the top 15%, with at least 100 Unit closings and more than $500,000 in Point of Closing Royalty Payments over that period, may receive a 1.50% rate on the first 12 Units when 50 to 99 Units closed in the prior year, or a 1.25% rate on the first 24 Units when at least 100 Units closed in the prior year. The reduction is conditional, not automatic.
Termination before construction: a franchisee that has not commenced construction within 36 months may terminate for $10,000.
Default and special events: Item 6 also lists a $0 to $1,000 securities-offering review fee; late interest at the lesser of 18% annually or the maximum lawful rate plus collection costs; $25 to $100 for insufficient funds; liquidated damages equal to the greater of 3% of estimated project value or 3% of actual completion value for specified breaches; prevailing-party litigation expenses; indemnification obligations; and actual post-expiration or post-termination de-identification expenses.
No renewal fee is disclosed because the Franchise Agreement does not provide a conventional renewal term; it generally ends 30 days after sale of the last Unit, subject to the agreement's completion and termination provisions. Item 17 also states that arbitration costs, including the arbitrator's fee, are paid equally by the parties unless the arbitrator orders otherwise.
Source: 2026 FDD, Items 6, 8 and 17, pp. 9–15, 25–28 and 48–51.Does Epcon disclose a liquid capital or net worth minimum?
No liquid capital, net worth or non-borrowed-funds minimum is stated in the 2026 FDD. That absence should not be read as a statement that no equity is needed. Item 7 describes a large development investment, and its financing notes describe common lender structures rather than franchisor qualification thresholds.
These ranges are financing examples for raw-land acquisition and development loans, not Epcon liquid-capital requirements and not promises of approval.
Interpretation: the FDD says lower-equity private institutional financing generally carries substantially higher interest rates. Source: 2026 FDD, Item 7, Note 2, pp. 20–21.
Item 10 states that Epcon Communities Franchising, LLC does not offer direct or indirect financing, does not receive payments for placing financing and does not guarantee a loan or lease. It also requires a mortgage with a minimum amount of $200,000 against the project property to secure fees owed to the franchisor, subject to specified timing and subordination terms.
The distinction matters: Item 7 investment is the disclosed project cost range; lender equity is the portion a financing provider may require; and the $200,000 mortgage is a security instrument, not a disclosed liquid-capital minimum. The FTC Franchise Rule in 16 CFR Part 436 explains the required disclosure framework, including Items 7 and 10.
Source: 2026 FDD, Item 7, pp. 20–21 and Item 10, pp. 30–31.Ask the franchisor and proposed lenders to state separately the required borrower equity, cash reserves, guarantees, collateral, project-level contingency and any investor-return assumptions. None of those should be inferred from the absence of a published liquid-capital threshold.
Which costs remain uncertain or may fall outside the headline range?
The Item 7 totals are estimates for one 30-Unit detached-home project using a slab-on-grade Portico design, a Large Pavilion amenity and specified development timing. Epcon permits projects as small as 25 Units, while some communities exceed 100 Units. A different project size, home plan, amenity, land contract or local approval process can change the capital requirement.
Confirm the land contract. For developed lots, determine the two-lot acquisition price, the deposit percentage, the full lot-takedown schedule and how the community amenity cost is allocated across lots.
Price local site conditions. The FDD identifies zoning, utility availability, wetlands, soil and rock, groundwater, off-site improvements, governmental fees, building codes, wind, snow and seismic requirements as cost variables.
Separate initial and later payroll. Additional Funds exclude owner distributions and employee salaries. The $26,000 Item 7 sales-consultant line covers one six-month training salary, while later sales commissions generally arise after the initial investment period.
Confirm technology and computer costs. Item 7 separately includes optional BuildTopia licenses. Item 11 also estimates up to $2,000 per computer, up to $3,000 per AutoCAD user and about $135 monthly for business-class internet, but Item 7 does not label those three amounts as separate rows.
Price professional and insurance obligations. Item 8 estimates $4,000 to $4,750 for a conceptual site plan on a 12- to 25-acre site and specifies builder's risk, general liability, workers' compensation and commercial auto coverage. Confirm whether the site-plan charge is included in the applicable due-diligence budget; the FDD states coverage limits but does not estimate insurance premiums.
Resolve the security-cost discrepancy. Item 7 budgets $300 to $1,200 for mortgage and security recording and administration, while Item 6 estimates $200 to $1,000 for a similarly described reimbursement. Obtain the current written invoice method and applicable state and county recording costs.
Budget post-closing obligations separately. Point of Closing Royalty Payments, home warranties, surveys, technology royalties and later conference or training expenses are not all represented as fixed one-time startup amounts.
What capital question should a buyer resolve first?
The first decision is not whether the $75,000 Initial Franchise Fee is affordable. It is whether the proposed project will use raw land or developed lots, because that choice changes the 2026 Item 7 range from $1,208,600–$1,935,850 to $3,845,350–$6,398,350. The buyer then needs a project-specific funding plan that separates land and construction cash, lender equity, the $200,000 security instrument, Additional Funds and the royalty and marketing payments that continue through Unit closings.
The FTC Franchise Rule generally requires the disclosure document to be furnished at least 14 calendar days before a prospective franchisee signs a binding agreement or makes a covered payment. The FTC Franchise Rule page and the FTC Franchise Rule Compliance Guide provide the federal disclosure framework. Financial terms should be checked against the exact FDD and agreements delivered for the proposed transaction.
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