What is the Engel & Volkers agreement's definition of 'Engel & Volkers Residential Real Estate Brokerage'?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 2.1 Grant of Franchise: Subject to the terms of this Agreement, Franchisor hereby grants to Franchisee the non-exclusive right to establish and operate an ENGEL & VÖLKERS® residential real estate brokerage at the Approved Location for the provision of real estate brokerage services with respect to residential properties of the type permitted under Section 2.2 using the ENGEL & VÖLKERS System and Trademarks (the "Residential Real Estate Brokerage").
- 2.2 Types of Property: Franchisee may provide real estate brokerage services only for residential properties consisting of a house or building (including an apartment within a multi-family building) or undeveloped land, including leaseholds, vacation and resort residential units, cooperatives, condominiums, and any other form of real estate for which a residential real estate brokerage license is required under applicable law.
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' 2025 Franchise Disclosure Document, an Engel & Volkers Residential Real Estate Brokerage is defined as the non-exclusive right to establish and operate a real estate brokerage at an approved location, offering real estate brokerage services for residential properties using the Engel & Volkers System and Trademarks. This includes houses, buildings (including apartments), undeveloped land, leaseholds, vacation and resort residential units, cooperatives, condominiums, and any other form of real estate requiring a residential real estate brokerage license under applicable law.
While the franchise is specifically for residential real estate, franchisees may also offer commercial real estate brokerage services under the residential Trademarks, provided these services are ancillary to the residential services. The franchisee cannot present themselves primarily as a commercial real estate brokerage or a standalone provider of commercial services. Furthermore, the aggregate listings of commercial properties cannot exceed 5% of all listings in any calendar year during the agreement's term.
This definition is crucial for prospective franchisees as it sets the scope of their business operations. It clarifies the types of properties they can deal with and the extent to which they can engage in commercial real estate services. Franchisees must adhere to these limitations to avoid breaching the franchise agreement. Additionally, Engel & Volkers reserves all rights to the use of the System and Trademarks in the metaverse.