What are the potential consequences of not complying with real estate regulations as a Counselor Realty franchisee?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
ELL
Counselor requires you to confine your Business to the operation of a full service residential and/or commercial real estate brokerage business. You may not conduct any other business or activity at the Office (or any Additional Office or Extension Office), and you may not offer or sell any product or service from the Business except those authorized by Counselor. Your Business may be identified only by the Marks designated by Counselor. Your Business must operate in full compliance with all applicable local, state and federal laws and regulations. The Franchise Agreement also contains certain covenants restricting your freedom to engage in certain competitive activities, and requires you to indemnify Counselor and its affiliates for all claims and losses related to the operation of your Business. See Items 9(p) and 17, and Exhibit B.
17. RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION
The following tables list certain important provisions of the Franchise Agreement. You should read these provisions in the Franchise Agreement attached to this Franchise Disclosure Document. This table is qualified in its entirety by reference to the full text of the Franchise Agreement.
FRANCHISE AGREEMENT
| Provision | Section(s) in Franchise or Other Agreement | Summary |
|---|---|---|
| j. Assignment of contract by franchisor | Section 9.4 | Counselor may transfer its interest in Franchise Agreement by notice to you |
| k. |
Source: Item 1 — THE FRANCHISOR, AND ANY PARENT, PREDECESSORS AND AFFILIATES (FDD pages 7–8)
What This Means (2025 FDD)
According to the 2025 Counselor Realty Franchise Disclosure Document, franchisees must adhere to all applicable local, state, and federal laws and regulations. This includes maintaining a bona fide real estate broker's license in good standing. Failure to comply with these regulations can lead to several consequences.
Specifically, if a Counselor Realty franchisee fails to satisfy the agreed-upon schedule for the minimum number of real estate sales agents or maintain that minimum number, they may lose the exclusive right to operate a Counselor Realty office in their territory. Additionally, the territory itself may be altered at Counselor Realty's discretion, or the Franchise Agreement could be terminated.
Furthermore, the Franchise Agreement requires franchisees to indemnify Counselor Realty and its affiliates for all claims and losses related to the operation of their business. This means that if non-compliance with real estate regulations leads to claims or losses against Counselor Realty, the franchisee would be responsible for covering those costs. Prospective franchisees should carefully investigate all applicable regulations and ensure they can maintain compliance to avoid these potential penalties.