What is the Engel & Volkers agreement's definition of 'Sale and Leasing of Residential Properties'?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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, the franchise granted is for a residential real estate brokerage. This means franchisees are authorized to provide real estate services specifically for residential properties. These properties include houses or buildings, such as apartments in multi-family buildings, undeveloped land, leaseholds, vacation and resort residential units, cooperatives, condominiums, and any other form of real estate that requires a residential real estate brokerage license under applicable law.
While the primary focus is residential properties, Engel & Volkers franchisees can also 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 primarily as a commercial real estate brokerage. Furthermore, the aggregate listings of commercial properties cannot exceed 5% of all listings in any calendar year. This allows franchisees to cater to a broader client base while maintaining their core focus on residential real estate.
This definition is important for prospective franchisees as it clarifies the scope of their business operations. It sets clear boundaries on the types of properties they can deal with and prevents any potential misunderstandings about the services they are authorized to provide under the Engel & Volkers brand. Franchisees must adhere to these guidelines to remain in compliance with the franchise agreement and maintain the integrity of the Engel & Volkers system.