What is the Engel & Volkers agreement's definition of 'Residential Real Estate Brokerage Services'?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
and competitive factors and risks, has read Franchisor's Franchise Disclosure Document, and has not relied on any representations not set forth in this Agreement. Aware of the relevant facts, Franchisee desires to enter into this Agreement to obtain a franchise to use the ENGEL & VÖLKERS System to operate a residential real estate brokerage at the Approved Location. Franchisee agrees that it will bear the financial risk involved in operation of the real estate brokerage.
2. Nature of Franchise
- 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.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, a franchisee is granted the non-exclusive right to operate a residential real estate brokerage at an approved location. This brokerage provides real estate services specifically for residential properties, utilizing the Engel & Volkers system and trademarks. These residential properties include houses, buildings (including apartments), undeveloped land, leaseholds, vacation and resort units, cooperatives, and condominiums. The definition extends to any form of real estate that requires a residential real estate brokerage license under applicable law.
While the franchise is primarily for residential properties, Engel & Volkers allows franchisees to offer real estate brokerage services for commercial properties under certain conditions. These commercial services must be ancillary to the residential services, and the franchisee cannot present themselves as primarily a commercial real estate brokerage. The number of commercial property listings must not exceed 5% of all listings in any calendar year. This allowance is termed "Permitted Commercial Services" and is strictly limited to the residential trademarks, meaning franchisees cannot operate under other Engel & Volkers trademarks for these commercial services.
Engel & Volkers also emphasizes compliance with its system and documentation for the brokerage's location and exterior designs. Franchisees must not engage in activities incompatible with the franchise agreement or the types of properties covered. The agreement also requires franchisees to adhere to all applicable federal, state, and local laws and regulations, including maintaining the necessary real estate broker licenses. Franchisees must provide a copy of their real estate broker license to Engel & Volkers annually. Franchisees are expected to use standard contract terms consistent with local law when providing residential real estate broker services.