Does Engel & Volkers assume liability for damages arising from the franchisee's operation of the franchised business?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
te a defense to Franchisor's enforcement of the covenants not to compete in this Agreement. Franchisee agrees to pay all costs and expenses, including reasonable attorneys' and experts' fees that Franchisor incurs in connection with the enforcement of the covenants not to compete set forth in this Agreement.
- 16.5 Execution of Separate Agreement. Each shareholder, partner, member, officer, director, brokerage manager and office manager of Franchisee shall execute Franchisor's form of Confidentiality Agreement and Covenant Not to Compete attached as Appendix 3.
17. Liability/Indemnity
17.1 Indemnity:
Franchisee will, at its sole cost, at all times defend, reimburse and hold harmless Franchisor and its affiliates, subsidiaries, successors, assigns and designees; and, the officers, directors, managers, employees, contractors, agents, attorneys, shareholders, owners, members, designees and representatives of all of the foregoing (Franchisor and all others referenced above being the "Indemnified Parties"), and indemnify and hold harmless Franchisor and the other Indemnified Parties to the fullest extent permitted by law, against all claims, losses, liabilities and costs (as denominated in the following paragraph) incurred in connection with any judicial, administrative or arbitration action or proceeding (including bankruptcy, insolvency, debtor/creditor or similar proceedings), suit, claim, demand, investigation, or formal or informal inquiry (regardless of whether any of the foregoing is reduced to judgment) or any settlement of the foregoing, which actually or allegedly, directly or indirectly, arises out of, is based upon, is a result of or is related in any way to any element of Franchisee's entry into this Agreement; actions or omissions committed by Franchisee or its affiliates, employees, contractors, or Sales Advisors in connection with the operation of the ENGEL & VÖLKERS Residential Real Estate Brokerage hereunder; the establishment, construction, ownership, opening and operation of the office of Franchisee's franchised Business hereunder, including any other business operating within or in relation to the office (which other business, if any, shall be subsumed within this paragraph's references to the office) and further including (without limitation) any personal, bodily or mental injury, death, property damage or loss, suffered by any customer, visitor, manager, operator, supplier, employee, contractor, or guest of the franchised ENGEL & VÖLKERS office; crimes committed on or near any of the premises or facilities of Franchisee's franchised Business or vehicles used by Franchisee's franchised Business; all acts, errors, neglects or omissions engaged in by Franchisee, its contractors or subcontractors, as well as any third party, arising out of or related to the design, construction, conversion, build-out, outfitting, remodeling, renovation or upgrading of its franchised ENGEL & VÖLKERS office, whether or not any of the foregoing was approved by Franchisor; defects in any ENGEL & VÖLKERS franchised office that Franchisee constructs and/or operates, whether or not discoverable by Franchisee or by Franchisor; all acts, errors, neglects or omissions of Franchisee or the franchised ENGEL & VÖLKERS Residential Real Estate Brokerage and/or the owners, officers, directors, management, employees, agents, servants, contractors, partners, proprietors, affiliates or representatives of Franchisee and/or the franchised Business and/or the location thereof (or any third party acting on Franchisee's behalf or at Franchisee's direction), whether in connection with the franchised business, the office or otherwise, including (without limitation) any property damage, injury or death suffered or caused by any vehicle serving the franchised Business; any claim, however and wherever asserted, that Franchisor or its respective affiliates are the employer, joint employer or coemployer of Franchisee and/or Franchisee's employees or contractors; claims that Franchisee, its owners, employees, contractors, brokers or Franchisee's Sales Advisors are Franchisor's employees, agents or part of a common enterprise with Franchisor, including claims regarding violation or labor or employment law regulations; third party claims against Franchisor arising from or related to Franchisee's breach of the terms, restrictions and requirements of this Agreement (including, without limitation, Franchisee's unauthorized use of the Trademarks, violation of any applicable laws, codes, rules or regulations or failure to comply with Information Privacy Laws); Franchisee's violation of Information Privacy Laws; all liabilities arising from Franchisee's offer, sale and/or delivery of programs, services and/or products as contemplated by this Agreement; Franchisee's offer, sale and/or delivery of securities, equity interests or other ownership interests in Franchisee or the franchised ENGEL & VÖLKERS office or business of Franchisee; all activities, conduct and representations which Franchisee may engage in
connected to any actual or attempted assignment or other transfer (by operation of law or otherwise) of any interest whatsoever in Franchisee or its franchised ENGEL & VÖLKERS office or business (or any entity which controls Franchisee or its franchised ENGEL & VÖLKERS office or business); and, any action by any customer or client of Franchisee or visitor to Franchisee's office or any other facility operated in conjunction with Franchisee's franchised business (collectively, an "Indemnification Claim").
As used above, the phrase "claims, losses, liabilities and costs" includes all claims; causes of action; fines; penalties; liabilities; losses; employment liabilities; compensatory, exemplary, statutory or punitive damages or liabilities; costs of investigation; lost profits; court costs and expenses; reasonable attorneys' and experts' fees and disbursements; settlement amounts; judgments; compensation for damage to Franchisor's reputation and goodwill; costs of or resulting from delays; travel, food, lodging and other living expenses necessitated by the need or desire to appear before (or witness the proceedings of) courts or tribunals (including arbitration tribunals), or government or quasi-governmental entities (including those incurred by the Indemnified Parties' attorneys and/or experts); all expenses of refunds, compensation and any public notices; and, other such amounts incurred in connection with the matters described.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers does not assume liability for damages arising from the franchisee's operation of the franchised business. Instead, the franchisee is required to defend, reimburse, and hold harmless Engel & Volkers against all claims, losses, liabilities, and costs connected with any action or omission by the franchisee or its affiliates, employees, contractors, or sales advisors in the operation of the Engel & Volkers Residential Real Estate Brokerage. This includes any personal injury, death, property damage, or loss suffered by any customer, visitor, manager, operator, supplier, employee, contractor, or guest of the franchised Engel & Volkers office.
The franchisee's indemnification extends to various scenarios, including crimes committed on or near the premises, acts, errors, or omissions related to the design, construction, or operation of the franchised office, and claims that Engel & Volkers is the employer or joint employer of the franchisee or its personnel. It also covers claims arising from the franchisee's breach of the franchise agreement, violation of laws, or unauthorized use of trademarks. The franchisee is responsible for all liabilities arising from the offer, sale, and delivery of programs, services, and products, as well as the offer, sale, and delivery of securities or equity interests in the franchisee's business.
This indemnification does not cover liability associated with Engel & Volkers' gross negligence, willful misconduct, or criminal acts, unless joint liability is involved, in which case the indemnification extends to any comparative or contributory negligence attributable to the franchisee. To protect the Engel & Volkers system against loss, the franchisee must purchase and maintain customary insurance coverage, including fire, burglary, theft, damage from piped water, storm, financial liability, business interruption, employee honesty and liability, professional liability/errors and omissions, cyber liability/data breach, and general commercial liability insurance. The minimum coverage required is $2 million for professional liability insurance per occurrence and $2 million per occurrence for any other insurance.