What constitutes 'cause' for Engel & Volkers to terminate the Franchise Agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
This provision is subject to state law. | | e. Termination by franchisor without cause | §§4.8 | We can terminate upon written notice to you if we lose our rights to use the Engel & Völkers System and Trademarks. | | f. Termination by franchisor with cause | §§20.2 – 20.4, | We can only terminate if you default, except if we lose our rights to use the Engel & Völkers System and Trademarks. | | Provision | Section in | Summary | | | Franchise | | | w. Choice of law | §26.1 §8.3, Appendix 2 | New York law applies. For sales of goods and services by us, New York law applies. For sales of goods and services by E&V Residential or its affiliates based in Germany, German law applies. This provision may be subject to state law. | |---|---|---| | Provision | Section in | Summary | |-----------|------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | Franchise | | | | Agreement | | | | | agreement with us or our affiliates and the default | | | | under that agreement is not curable or you or your | | | | affiliate did not cure it during the cure period (and we | | | | may also terminate the other agreement if you are in | | | | default under the Franchise Agreement); you omitted | | | | or misrepresented any material fact in the information | | | | you furnished to us in connection with our decision to | | | | enter into a Franchise Agreement with you; you and | | | | we agree to terminate the Franchise Agreement; you | | | | purport to transfer any interest in your franchise to a | | | | third party in violation of the Franchise Agreement; | | | | you use or duplicate any aspects of the Engel & | | | | Völkers System, services, program or products in an | | | | unauthorized fashion; you engage in any business or | | | | market any services under a name or mark that in our | | | | opinion is confusingly similar to the Trademarks; you | | | | abandon or cease to operate your franchised business; | | | | you knowingly conceal revenues, maintain false | | | | books or records, falsify information or otherwise | | | | defraud or make false representations to us; you do | | | | not maintain required financial records, you are | | | | found, after our audit, to have understated your | | | | revenues by 2% or more at least three times within | | | | any 36-months period, or by 5% for a reporting | | | | period; you take, withhold, misdirect or appropriate | | | | funds for your own use from your employees' wages, | | | | us or you systematically fail to deal fair and honestly | | | | with your staff members, clients, sales advisors or | | | | suppliers, or fail to take action against or discharge an | | | | agent, servant or staff member sho embezzled funds; | | | | you commit the same act of default within six month | | | | after having cured a default under Section 20.4; you | | | | attempt to or interfere in our contractual relationships; | | | | you engage in a practice that subjects you or us to | | | | widespread publicity, ridicule and derision; you | | | | breach a provision of the Franchise Agreement | | | | relating to our advertising standards (incl. but not | | | | limited to our corporate identity) which is not cured | | | | within 3 days after our written notice thereof, your | | | | licenses to operate the franchised business or other | | | | governmental authorizations are revoked or | | | | terminated or you engage in any act or conduct, or | | | | fail to engage in any act or conduct, which authorizes | | | | us under the Franchise Agreement to terminate you | | | | immediately upon notice to you.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 63–71)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers can terminate the franchise agreement with cause if the franchisee defaults, except if Engel & Völkers loses its rights to use the Engel & Völkers System and Trademarks. Default conditions include breaches of agreements with Engel & Völkers or its affiliates, especially if the default isn't curable or remains uncured after a cure period.
Other causes for termination include misrepresentation of material facts during the application process, mutual agreement to terminate, unauthorized transfer of franchise interests, or unauthorized use or duplication of the Engel & Völkers System. Engaging in business under a confusingly similar name, abandoning the business, or knowingly concealing revenues also constitute cause.
Further reasons for termination with cause include failing to maintain required financial records, understating revenues by 2% or more at least three times within a 36-month period, or by 5% for a reporting period, mismanaging employee wages, failing to deal fairly with staff, clients, or suppliers, or not addressing embezzlement. Committing the same default act within six months of curing a previous default, interfering with Engel & Volkers' contractual relationships, or engaging in practices that cause widespread negative publicity are also grounds for termination. Finally, breaching advertising standards, losing necessary licenses, or engaging in conduct that allows immediate termination under the Franchise Agreement can lead to termination with cause.