What is the definition of 'Permitted Commercial Services' for an Engel & Volkers franchisee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Although the Franchise Agreement grants a franchise for a Residential Real Estate Brokerage, you may also provide real estate brokerage services for commercial properties under residential Trademarks, provided: (i) the commercial real estate brokerage services are offered as a service ancillary to the provision of real estate brokerage services for residential properties, (ii) you do not hold yourself out as providing commercial real estate brokerage services as your principal business or as being a stand-alone provider solely of commercial services, and (iii) your aggregate listings on a unit basis of commercial properties does not exceed 5% of all its listings in any calendar year during the term of your Franchise Agreement ("Permitted Commercial Services"). For purposes of clarity, the definition of Permitted Commercial Services does not provide you with a right to conduct business under any other Trademarks, other than the residential Trademarks.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 62–63)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, 'Permitted Commercial Services' refers to the limited ability of a franchisee to provide real estate brokerage services for commercial properties while operating a residential real estate brokerage franchise.
Specifically, Engel & Volkers franchisees may offer commercial real estate brokerage services under the residential trademarks if these services are ancillary to their residential business. This means the commercial services should be secondary to the primary focus on residential properties. The franchisee cannot present themselves as a principal commercial real estate brokerage or a standalone provider of only commercial services.
Furthermore, the number of commercial property listings must not exceed 5% of the franchisee's total listings in any calendar year. This restriction ensures that the franchisee remains focused on residential properties, as the franchise agreement is primarily for a Residential Real Estate Brokerage. This definition clarifies that franchisees do not have the right to operate under any trademarks other than the residential trademarks when providing these 'Permitted Commercial Services'.