What is the meaning of 'inventory' in the context of a Christies International Real Estate franchise 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 FDD, the term 'inventory' refers to the properties listed by a franchisee. The franchise agreement stipulates that if a franchisee lists properties in an 'Other Area' that exceed 5% of their total inventory, and they do not cease such listings after receiving notice from Christies International Real Estate, it constitutes a default of the agreement, potentially leading to termination.
Conversely, Christies International Real Estate will use commercially reasonable efforts to limit other licensees, franchisees, or affiliates from listing more than 5% of their property inventory within a franchisee's protected territory, assuming those parties haven't been granted unlimited rights. However, Christies International Real Estate is not obligated to enforce this provision against other parties.
This clause is designed to protect the franchisee's exclusive rights within their protected territory, preventing other franchisees or affiliates from significantly encroaching on their market by listing a disproportionate number of properties within that territory. It also restricts the franchisee from overstepping into other territories, maintaining a balance and preventing market overlap among franchisees. This ensures that each franchisee can focus on developing their business within their designated area without undue competition from within the Christies International Real Estate network.