What constitutes an automatic termination of the Engel & Volkers franchise agreement without notice?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.2 Automatic Termination Without Notice.
Franchisee will be in default under this Agreement, and all rights granted in this Agreement will immediately and automatically terminate and revert to Franchisor without notice to Franchisee, if: Franchisee, the franchised Business or any affiliate or Guarantor thereof is adjudicated as bankrupt or insolvent; all or a substantial portion of the assets of the franchised Business are assigned to or for the benefit of any creditor; a petition in bankruptcy is filed by or against Franchisee, the franchised Business and/or any affiliate or Guarantor thereof and is not immediately contested and thereafter dismissed or vacated within sixty (60) days from filing; Franchisee, the franchised Business and any affiliate or Guarantor thereof cause, permit or acquiesce in an order for relief under the U.S. Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency, reorganization, receivership or other similar law now or hereafter in effect, or consent to the entry for an order for relief in an involuntary proceeding or to the conversion of an involuntary proceeding to a voluntary proceeding, under any such law; a bill in equity or other proceeding for the appointment of a receiver or other custodian of Franchisee, the franchised Business, or any affiliate or Guarantor of the franchised Business, or the assets of any of them, is filed and consented to by Franchisee; a receiver or other custodian (permanent or temporary) of all or part of the assets or property of Franchisee, the franchised Business and any affiliate or Guarantor of the franchised Business is appointed by any court of competent jurisdiction; proceedings for a composition with creditors under any federal or state law are instituted by or against Franchisee, the franchised Business or any affiliate or Guarantor thereof; Franchisee, any affiliate of Franchisee or any Guarantor are dissolved; execution is levied against Franchisee, the franchised Business, any affiliate or Guarantor thereof and/or the property of any of the foregoing; the property of the franchised Business is sold after levy thereon by any governmental body or agency, sheriff, marshal or other person authorized under federal, state and/or local
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchise agreement can be automatically terminated without notice if certain financial or legal conditions are met. Specifically, this occurs if the franchisee, the franchised business, or any affiliate or guarantor is adjudicated as bankrupt or insolvent. This also applies if a substantial portion of the assets of the franchised business are assigned to or for the benefit of any creditor.
Furthermore, automatic termination occurs if a bankruptcy petition is filed by or against the franchisee, the franchised business, or any affiliate or guarantor and is not contested and dismissed within sixty (60) days. The agreement also terminates automatically if the franchisee, the franchised business, or any affiliate or guarantor consents to an order for relief under the U.S. Bankruptcy Code or similar laws, or consents to the appointment of a receiver.
Finally, the Engel & Volkers franchise agreement will be automatically terminated without notice if proceedings for a composition with creditors are instituted by or against the franchisee, the franchised business, or any affiliate or guarantor. Automatic termination also occurs if the franchisee, any affiliate, or any guarantor is dissolved, or if execution is levied against them or their property. Similarly, the agreement terminates automatically if the property of the franchised business is sold after levy by a governmental body.