What is the definition of 'proposed assignee' in the context of an Engel & Volkers franchise sale?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.3.1 That the proposed assignee (meaning individual or business entity which, after the proposed assignment, will be the franchisee under this Agreement or under any successor/renewal agreement) applies to Franchisor for acceptance as a franchisee and demonstrates to Franchisor's satisfaction that the proposed assignee (and, if it is a business entity, each and every Principal owner and guarantor of the proposed assignee) possesses the skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume the duties and obligations under this Agreement or any successor agreement.
Franchisee must pay the costs of any investigation required to be conducted by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, a 'proposed assignee' is defined as the individual or business entity that will become the franchisee under the existing Franchise Agreement or any successor agreement after the assignment is completed.
For a prospective Engel & Volkers franchisee, this definition is crucial if they plan to sell their franchise in the future. The potential buyer, or 'proposed assignee,' must meet certain criteria to be approved by Engel & Volkers. Specifically, the proposed assignee must apply for acceptance as a franchisee and demonstrate that they (and their principal owners and guarantors, if the assignee is a business entity) possess the necessary skills, qualifications, financial condition, background, history, reputation, economic resources, education, managerial and business experience, moral character, credit rating, and ability to fulfill the obligations under the Franchise Agreement.
This requirement ensures that any new franchisee taking over an existing Engel & Volkers location is capable of maintaining the brand's standards and upholding the terms of the agreement. The franchisee is responsible for covering the costs of any investigation that Engel & Volkers deems necessary to assess the proposed assignee's qualifications. This process is typical in franchising, as franchisors want to ensure that new owners are a good fit for the system and can continue to operate the business successfully.