Can Engel & Volkers condition supplier approval on the supplier providing adequate insurance protection?
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. There is no fee for requesting that we approve another supplier.
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. Engel & Volkers can concentrate purchases with specific suppliers to potentially secure lower prices, better advertising support, or improved services.
Prospective Engel & Volkers franchisees need to understand that if they wish to use a supplier not already approved by Engel & Volkers, they must seek written approval from Engel & Volkers and provide all requested information, specifications, and samples. Engel & Volkers has the discretion to approve or disapprove any supplier.
Engel & Volkers's approval of a supplier can be conditional. These conditions may relate to delivery frequency, service standards (including complaint handling), purchase concentration, and other criteria. Critically, Engel & Volkers can require that the supplier provide adequate insurance protection, execute indemnity and confidentiality agreements, and pay reasonable license fees if the trademarks are used. Engel & Volkers will notify the franchisee within 4 weeks of receiving all requested materials whether the supplier is approved or not; if no response is received within 4 weeks, the supplier is deemed approved.
This means that an Engel & Volkers franchisee's choice of suppliers can be limited, and that Engel & Volkers can exert considerable control over the supply chain, including requiring specific insurance coverage from those suppliers. Franchisees should consider these restrictions and conditions when evaluating the franchise opportunity.