What is the consequence if an Engel & Volkers franchisee fails to start operating by the Opening Date?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Failure to timely begin operation of Franchisee's Residential Real Estate Brokerage on the Opening Date is deemed a material breach of this Agreement.
If Payment Start Date occurs before the Opening Date without Franchisor's written consent, in addition to other remedies, Franchisee must pay all ongoing fees under this Agreement from the date Franchisee begins operating the Residential Real Estate Brokerage using the Trademarks and the Engel & Völkers System.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, failing to begin operation of the Residential Real Estate Brokerage on the Opening Date is considered a material breach of the Franchise Agreement. This gives Engel & Volkers the right to terminate the agreement without providing an opportunity for the franchisee to correct the issue.
This means that a prospective Engel & Volkers franchisee must be diligent in ensuring that their business is fully operational by the agreed-upon Opening Date. Delays in securing the location, obtaining necessary licenses, or completing the setup of the brokerage could lead to immediate termination of the franchise agreement. The franchisee would lose all rights granted under the agreement, including the right to operate under the Engel & Volkers brand and utilize their system and trademarks.
Additionally, if the Payment Start Date occurs before the Opening Date without Engel & Volkers' written consent, the franchisee must pay all ongoing fees from the date they begin operating the Residential Real Estate Brokerage using the Engel & Volkers trademarks and system. This highlights the importance of adhering to the agreed-upon timeline and obtaining written consent from Engel & Volkers for any deviations.