EPCON COMMUNITIES

The financial entry is steep, as Item 7 outlines: total initial investment spans $3,845,350 to $6,398,350, dominated by land, construction, and development for ranch-style attached and detached homes. Upfront, there's a $75,000 franchise fee for the proprietary system, architectural plans, and support. Item 6 fees compound with tiered royalties—2% of gross sales price on the first six units, decreasing to 1% thereafter, enforced by a $3,000 minimum per unit—plus a $2,000 monthly minimum royalty and $625 monthly marketing contribution. These structure costs around project volume, fitting the multi-unit development model, but demand substantial capital and scale to breakeven.

System vitality raises flags per Item 20: 80 franchised locations plus 25 corporate-owned total 105, yet the network contracted from 83 to 80 units (-4%) between 2024 and 2025, with 5 terminations and modest projections of 7 new units. Franchising since 1996 from Dublin, OH, Epcon shows maturity, but the lack of Item 19 earnings disclosure leaves investors blind on average revenues or profits—critical for a capital-intensive play where project timelines and housing demand dictate cash flow. This opacity, amid slowing growth, suggests vetting closely: strong for experienced developers with deep pockets, riskier for newcomers chasing quick expansion.