When does the calculation of Gross Revenues start anew for Engel & Volkers franchisees each year?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
On January 1 of each calendar year throughout the Term of the Agreement, calculation of Franchisee's Gross Revenues will start anew from $0, the Royalty rate will be reset to six percent (6%) on all Gross Revenues, and the respective tiers pursuant to the Royalty Schedule will have to be met by Franchisee's Gross Revenues to reduce Franchisee's Royalties for that calendar year.
On January 1 of each calendar year throughout the Term of the Agreement, calculation of Franchisee's Gross Revenues will start anew from $0, the National Marketing and Technology Fund Fee rate will be reset to two percent (2%) on all Gross Revenues, and the respective tiers pursuant to the NMTFF Schedule will have to be met by Franchisee's Gross Revenues to reduce Franchisee's National Marketing and Technology Fund Fee rate for that calendar year.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the calculation of a franchisee's Gross Revenues resets to $0 on January 1st of each calendar year. This reset affects both the royalty rate and the National Marketing and Technology Fund Fee (NMTFF) rate.
The royalty rate for Engel & Volkers franchisees starts at six percent (6%) on all Gross Revenues at the beginning of each calendar year. The franchisee must then meet certain Gross Revenue tiers throughout the year to reduce their royalty rate, as outlined in the Royalty Schedule.
Similarly, the National Marketing and Technology Fund Fee rate is initially set at two percent (2%) on all Gross Revenues on January 1st. The franchisee must then meet specific tiers within the NMTFF Schedule to potentially lower this fee rate during the calendar year. This annual reset ensures that franchisees start fresh each year in terms of royalty and NMTFF calculations, incentivizing consistent performance throughout the term of the agreement.