What is the definition of 'default' that would allow Christies International Real Estate to terminate the license agreement?
Christies_International_Real_Estate Franchise · 2025 FDDAnswer from 2025 FDD Document
If you and your agents are licensed, as prescribed by law, to provide real estate brokerage services in an area where another licensee, franchisee or Affiliate has been granted a protected territory by us ("Other Area") but their grant does not prevent others from offering real estate brokerage services under the Marks in the Other Area, so long as you do not exceed 5% of your inventory (as measured by the number of properties) at any given time, you may list properties for sale using the Marks in the Other Area so long as they are listed from your Main Office or Additional Office. 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.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 43–47)
What This Means (2025 FDD)
According to Christies International Real Estate's 2025 Franchise Disclosure Document, a franchisee can be in default of their license agreement if the properties they list for sale in an area outside of their protected territory exceed 5% of their total inventory. This "Other Area" refers to a territory where another Christies International Real Estate franchisee or affiliate has been granted rights, but those rights do not prevent others from offering real estate services under the Christies International Real Estate brand.
This default provision is triggered if the franchisee does not promptly cease listing properties in the Other Area after receiving notice from Christies International Real Estate that they have exceeded the 5% threshold. In such a case, Christies International Real Estate has the right to terminate the License Agreement.
This clause is important for prospective franchisees to understand, as it highlights the limitations on where they can list properties for sale under the Christies International Real Estate brand. While franchisees may be able to list properties outside their protected territory, they must carefully monitor their inventory to ensure they do not exceed the 5% limit. Failure to do so could result in the termination of their franchise agreement.