What is the definition of 'Offer' in the context of an Engel & Volkers franchise assignment?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee or any of its owners wish to solicit, offer, or discuss the assignment of any equity or economic interest in Franchisee or assets of its business to a third party (whether by stock sale, asset sale, merger, operation of law or otherwise), Franchisee shall use its best efforts and shall employ reasonable security measures, including having any third parties who are to be presented with Confidential Information sign appropriate nondisclosure agreements which are acceptable to Franchisor, to prevent any unauthorized disclosure of or access to the Proprietary Information and shall immediately advise Franchisor of any information it has or receives of any unauthorized disclosure or access. Franchisee shall provide copies of all such non-disclosure agreements to Franchisor upon request.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, an "offer" in the context of a franchise assignment refers to when a franchisee or any of its owners wish to solicit, offer, or discuss the assignment of any equity or economic interest in Franchisee or assets of its business to a third party. This includes scenarios such as a stock sale, asset sale, merger, operation of law, or other means of transferring ownership or economic benefits.
Engel & Volkers requires franchisees to take specific precautions when considering such an offer. Franchisees must use their best efforts and employ reasonable security measures to prevent unauthorized disclosure of proprietary information, including having third parties sign nondisclosure agreements acceptable to Engel & Volkers before presenting them with confidential information. The franchisee must also immediately inform Engel & Volkers of any unauthorized disclosure or access to this information and provide copies of all non-disclosure agreements upon request.
This process is in place to protect Engel & Volkers' interests and ensure that any potential new franchisee meets their standards. Before a sale can proceed, Engel & Volkers has the right of first refusal. If Engel & Volkers declines to exercise this right, they will not unreasonably withhold consent to the sale, transfer, or assignment, provided that certain conditions are met. These conditions include the proposed assignee applying for acceptance as a franchisee and demonstrating that they possess the necessary skills, qualifications, financial condition, background, and ability to fulfill the obligations under the franchise agreement.