What is the condition for paying the Tax indemnity to Engel & Volkers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| they have been timely | |||
| reported. | |||
| Attorneys' Fees | Varies | On demand. | You are responsible for our |
| costs and attorney's fees if we | |||
| incur them in any litigation | |||
| proceeding with you in which | |||
| we prevail or if we have to | |||
| obtain an injunction against | |||
| you. | |||
| Indemnification | You must indemnify us and other parties against all costs and expenses, including attorney's fees, arising out of claims by third parties as a result of your actions or omissions | On demand | Payable to us or our affiliates and their respective directors, officers, employees or agents. |
| Tax indemnity | You must pay us the | On demand | You must pay regardless of |
| amount of any state or | whether the tax is imposed | ||
| local sales, use, gross | directly on us, or required to | ||
| receipts or similar tax that | be withheld by you from | ||
| we may be required to pay | amounts due us, or is | ||
| on payments which you | otherwise required to be | ||
| make to us | collected by you from us. |
Source: Item 6 — OTHER FEES (FDD pages 22–30)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the tax indemnity is payable on demand. The franchisee must pay Engel & Volkers the amount of any state or local sales, use, gross receipts, or similar tax that Engel & Volkers may be required to pay on payments which the franchisee makes to them.
This means that if a state or local government assesses a tax on the royalty or other fees that the franchisee pays to Engel & Volkers, the franchisee is responsible for covering the cost of that tax. This obligation exists regardless of whether the tax is imposed directly on Engel & Volkers, required to be withheld by the franchisee from amounts due to Engel & Volkers, or otherwise required to be collected by the franchisee from Engel & Volkers.
In practical terms, this condition means that franchisees need to be aware of potential state and local tax obligations related to their payments to Engel & Volkers. They should consult with a tax advisor to understand these obligations and ensure they are properly accounted for in their financial planning. This is a fairly standard clause in franchise agreements, as franchisors typically pass on the responsibility for these types of taxes to their franchisees.