What is the consequence if an Engel & Volkers franchisee fails to comply with laws and regulations?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ial Real Estate Brokerage location and exterior brokerage designs (renderings) that are compliant with the ENGEL & VÖLKERS' System and System Documentation and that failure to do so will be a material breach of this Agreement. Franchisee hereby agrees not to encourage or permit any activities in its Residential Real Estate Brokerage which are incompatible with this Agreement, the ENGEL & VÖLKERS System or with the type of properties covered by this Agreement. Any exceptions to this rule shall require the prior written consent of Franchisor.
- 6.7 Laws and Regulations: Franchisee hereby agrees to observe and obey all federal, state and local laws, official regulations and decrees applicable in the state where its Approved Location is located, as well as anywhere else where Franchisee conducts business pursuant to this Agreement. This obligation includes licensing as a real estate broker, and any licenses and permits which it may require for the performance of its business. During the Term, Franchisee must provide Franchisor annually (no later than January 31 of each year) with a current copy of its real estate broker license. In particular, Franchisee agrees to abstain from any actions which Franchisor has expressly agreed not to perform in agreements with third parties or from which it is obliged to abstain under law. Franchisee understands and agrees that it shall be liable for any damage or loss incurred by Franchisor as a result of its failure to observe the foregoing undertakings.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees must adhere to all applicable federal, state, and local laws and regulations. This obligation includes maintaining the necessary real estate broker licenses and permits required to operate their business. Engel & Volkers franchisees must also avoid any actions that Engel & Volkers has expressly agreed not to perform in agreements with third parties or is legally obligated to abstain from. Franchisees are required to provide Engel & Volkers with a current copy of their real estate broker license annually, no later than January 31st.
Engel & Volkers franchisees are liable for any damages or losses incurred by Engel & Volkers due to their failure to comply with these legal and regulatory obligations. This means that if a franchisee's non-compliance results in financial or reputational harm to Engel & Volkers, the franchisee will be responsible for covering those costs. This could include legal fees, settlements, fines, or other expenses incurred by Engel & Volkers as a result of the franchisee's actions.
Furthermore, Engel & Volkers franchisees must comply with all federal and state information data privacy and data security laws and regulations applicable to their franchised business. This includes implementing security measures to protect financial and personal information, providing customers with privacy policy notices, disclosure notices, and opt-out notices. Failure to comply with these Information Privacy Laws can also lead to the franchisee being held liable for any resulting damages or losses incurred by Engel & Volkers. This requirement ensures that franchisees handle sensitive data responsibly and in accordance with legal standards, protecting both customers and the brand's reputation.