Does the Engel & Volkers agreement allow franchisees to operate under trademarks other than the residential trademarks when providing Permitted Commercial Services?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Although this Agreement is granting a franchise for a Residential Real Estate Brokerage, Franchisee may also provide real estate brokerage services for commercial properties under the residential Trademarks, provided: (i) the commercial real estate brokerage services are offered as a service ancillary to the provision of real estate brokerage services for residential properties, (ii) Franchisee does not hold itself out as providing commercial real
estate brokerage services as its principal business or as being a stand-alone provider solely of commercial services, and (iii) Franchisee's aggregate listings on a unit basis of commercial properties does not exceed five percent (5%) of all its listings in any calendar year during the term of Franchisee's agreement ("Permitted Commercial Services"). For purposes of clarity, the definition of Permitted Commercial Services does not provide Franchisee with a right to conduct business under any other Trademarks, other than the residential Trademarks.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees are specifically restricted to using only the residential trademarks, even when offering Permitted Commercial Services. The agreement grants franchisees the right to operate a residential real estate brokerage using the Engel & Volkers system and trademarks. While franchisees can provide commercial real estate brokerage services under certain limited conditions, they must still use the residential trademarks for these services.
Specifically, Engel & Volkers franchisees can offer commercial real estate brokerage services as an ancillary service to their residential business, provided they do not present themselves primarily as a commercial brokerage and their commercial listings do not exceed 5% of their total listings in any calendar year. This allowance is termed "Permitted Commercial Services." However, the FDD is clear that this provision does not allow franchisees to operate under any trademarks other than the residential trademarks, maintaining brand consistency.
This restriction means that Engel & Volkers franchisees must market all their services, including the Permitted Commercial Services, under the Engel & Volkers residential brand. This requirement ensures that the brand remains consistent and recognizable to consumers, regardless of the type of property being brokered. Franchisees need to be aware that they cannot use separate or different branding for their commercial services, which could limit their ability to target specific commercial clients or markets effectively.