What actions are considered a default of the Christies International Real Estate agreement?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
If your properties listed in the Other Area exceeds 5% of your inventory and, upon notice from us, you do not cease such listings promptly, you will be in default, and we can terminate the Agreement.
Conversely, to the extent another licensee, franchisee, Affiliate, or its agents, are licensed as prescribed by law, to provide real estate brokerage services in your Protected Territory, we will use commercially reasonable efforts to limit such party from listing more than 5% of its inventory of properties using the Marks in your Protected Territory, assuming such party has not been granted unlimited rights by us.
However, we have no obligation to enforce this provision against such other parties.
Source: Item 23 — RECEIPT (FDD pages 54–177)
What This Means (2025 FDD)
According to the 2025 Christies International Real Estate Franchise Disclosure Document, a franchisee will be in default of their agreement if the properties they list in an 'Other Area' exceed 5% of their inventory, and they do not cease such listings promptly after receiving notice from Christies International Real Estate. This clause is designed to ensure that franchisees focus their efforts within their designated territory and do not overstep into areas that might be the responsibility of other franchisees or the franchisor itself.
This default condition is significant for prospective franchisees as it highlights the importance of adhering to the territorial boundaries and inventory management expectations set by Christies International Real Estate. Franchisees need to carefully monitor the location of the properties they list and ensure compliance with the 5% threshold to avoid potential termination of their franchise agreement. The term 'Other Area' is not defined in the provided documentation. It is important for prospective franchisees to clarify what constitutes an 'Other Area' to ensure compliance.
While the franchisor agrees to use commercially reasonable efforts to limit other licensees or franchisees from listing more than 5% of their inventory within a franchisee's protected territory, Christies International Real Estate does not guarantee enforcement of this provision. This means that franchisees might face competition from other franchisees or licensees listing properties in their territory, although the franchisor intends to limit such occurrences. This lack of a strict enforcement obligation represents a potential risk for franchisees, as it could impact their ability to exclusively market properties within their protected territory.
Overall, this default provision underscores the need for Christies International Real Estate franchisees to maintain vigilance over their listing practices and to understand the boundaries of their operational rights. Prospective franchisees should seek clarification on the definition of 'Other Area' and the practical measures they can take to ensure compliance and protect their territorial interests.