Can Engel & Volkers condition supplier approval on requirements involving standards of service?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
We may designate or approve a Supplier of any products or services to be used in your franchised business. We may concentrate purchases with one or more Suppliers to obtain lower prices, better advertising support and/or better services for any group of your business. If you propose to contract for or purchase products or services from any supplier that we have not previously designated or approved, you must notify us in writing and submit to us all information, specifications and samples that we request. Any products or services from Suppliers must meet the Engel & Völkers standards. The System Documentation contains guidelines, templates and specifications that are modified by us periodically. We will approve any products or services based on samples that have been provided to us. We reserve the right to require that samples from the proposed Supplier be delivered to us or our designated testing facility for evaluation and testing. We will have sole discretion as to whether or not to approve any supplier. Approval of a Supplier of any products or services must be made by us in writing and may also be conditioned on requirements
involving the frequency of delivery, standards of service, including prompt attention to complaints, concentration of purchases and other criteria, and on the Supplier providing us with adequate insurance protection, the Supplier's execution of reasonable indemnity and confidentiality agreements, and the Supplier's payment of reasonable license fees if the Trademarks are used. Our approval of a Supplier may be temporary or conditional, pending our evaluation of the Supplier. You will be notified by us within 4 weeks after we receive all the requested material for review whether or not a supplier is approved. If we do not respond within 4 weeks, the supplier will be deemed approved.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 38–40)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, Engel & Volkers has the right to designate or approve suppliers for products and services used in the franchised business. If a franchisee proposes to use a supplier not already approved, they must submit information for Engel & Volkers's review. Engel & Volkers will assess whether to approve the supplier. Engel & Volkers has sole discretion over supplier approval. Engel & Volkers may concentrate purchases with particular suppliers to get better pricing, advertising, or service. Engel & Volkers may re-inspect the products or services of any approved Supplier and to revoke the approval upon the Supplier's failure to continue to meet any of their then-current criteria.
Engel & Volkers's approval of a supplier can be conditional. These conditions may include requirements related to the frequency of delivery and standards of service, including how promptly the supplier addresses complaints. Further conditions can involve the concentration of purchases and other criteria. Engel & Volkers may also require the supplier to provide adequate insurance protection, execute reasonable indemnity and confidentiality agreements, and pay reasonable license fees if the Trademarks are used.
This means that if you, as an Engel & Volkers franchisee, wish to use a supplier not already approved, Engel & Volkers can impose specific requirements on that supplier related to service standards, insurance, and other factors. The supplier must meet these conditions to gain and maintain approval. This ensures that all suppliers meet Engel & Volkers's standards, protecting the brand's reputation and ensuring consistent service levels across all franchises. If Engel & Volkers does not respond within 4 weeks after receiving all the requested material for review, the supplier will be deemed approved.
This level of control over suppliers is common in franchising to maintain quality and consistency. However, it also means franchisees may have limited flexibility in choosing suppliers and may need to adhere to Engel & Volkers's approved list and conditions, even if they find alternative suppliers with potentially better pricing or terms. Franchisees should carefully consider these restrictions and discuss any concerns with Engel & Volkers before signing the franchise agreement.