Does Engel & Volkers consider the Franchise Agreement a binding obligation of the franchisee and each principal?

According to Engel & Volkers' 2025 Franchise Disclosure Document, the Franchise Agreement is considered a valid and binding obligation for both the franchisee and each principal involved. This means that all parties signing the agreement are legally responsible for adhering to its terms and conditions. This acknowledgement is crucial, as it establishes the legal foundation for the franchise relationship.

Specifically, the franchisee's execution, delivery, and performance of the agreement must not violate any existing agreements or commitments they have. If the franchisee is a business entity, it must be properly organized, legally existing, and authorized to conduct business in the relevant states. Furthermore, the franchisee must not have any undisclosed material liabilities or claims that could affect their ability to fulfill the agreement. These stipulations ensure that the franchisee is in good standing and capable of meeting their obligations under the agreement.

Engel & Volkers also requires each principal to acknowledge that they have read the agreement and the Franchise Disclosure Document, and that they are capable of complying with all its terms and the Principal's Guarantee and Assumption of Obligations. This personal attestation from each principal reinforces their commitment to the franchise and their understanding of the responsibilities involved. This clause is designed to prevent future disputes by ensuring that all parties are fully informed and capable of fulfilling their duties.