May Engel & Volkers concentrate purchases with one or more suppliers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may concentrate purchases with one or more Suppliers to obtain lower prices, better advertising support and/or better services for any group of franchisees. If Franchisee proposes to contract for or purchase products or services from any supplier that Franchisor has not previously designated or approved for such products or services, Franchisee must notify Franchisor in writing and submit to Franchisor all information, specifications and samples that Franchisor requests. Any products or services from Suppliers must be in accordance with the then-current ENGEL & VÖLKERS System standards. Such approval of any products or services will be made by Franchisor based on samples that have been provided to it. Franchisor reserves the right to require that samples from the proposed Supplier be delivered to Franchisor or its designated testing facility for evaluation and testing. Franchisor will have sole discretion as to whether or not to approve any supplier. Approval of a Supplier as to any products or services must be made by Franchisor in writing and may also be conditioned on requirements relating to the frequency of delivery, standards of service, including prompt attention to complaints, concentration of purchases and other criteria, and may be conditioned on the supplier providing Franchisor with adequate insurance protection, the Supplier's execution of reasonable indemnity and confidentiality agreements, and the Supplier's payment of reasonable license fees to Franchisor if the Trademarks are to be used, and may be temporary or conditional, pending Franchisor further evaluation of the Supplier.
Franchisor reserves the right to re-inspect, at any time, the products and/or services of any approved Supplier and to revoke the approval upon the Supplier's failure to continue to meet any of Franchisor's then current criteria.
Franchisor and/or its affiliates may realize a profit or receive payments, rebates, discounts or other allowances in connection with Franchisee's purchases of products or services from approved Suppliers, and Franchisor and/or its affiliates may retain those profits, payments, rebates, discounts or other allowances for its own account without having any obligation to provide any benefits to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers has the right to concentrate purchases with specific suppliers. This is to potentially secure better pricing, enhanced advertising support, and improved services for its franchisees. If a franchisee wishes to use a supplier not already approved by Engel & Volkers, they must seek written approval from Engel & Volkers, providing all necessary information, specifications, and samples requested.
Engel & Volkers maintains the authority to approve or disapprove any supplier at its sole discretion. Approvals are based on provided samples and adherence to Engel & Volkers' system standards. Approval may depend on factors such as delivery frequency, service standards, complaint handling, purchase volume, and the supplier's ability to provide adequate insurance, indemnity, and confidentiality agreements. Engel & Volkers may also require the supplier to pay reasonable license fees if Engel & Volkers' trademarks are used. Approvals can be temporary or conditional, pending further evaluation.
Engel & Volkers also reserves the right to re-inspect the products and services of any approved supplier and revoke approval if the supplier fails to meet Engel & Volkers' current criteria. Furthermore, Engel & Volkers or its affiliates may profit from franchisee purchases from approved suppliers through payments, rebates, discounts, or other allowances, which they are entitled to retain without obligation to share with the franchisee. This arrangement allows Engel & Volkers to maintain quality control and potentially benefit financially from the supply chain, while franchisees are obligated to use approved suppliers to ensure brand consistency and adherence to system standards.