Who determines disputes regarding the value of assets in an Engel & Volkers assignment, and who pays for it?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Any dispute regarding the value of all or any part of the assets or rights proposed to be assigned and/or the consideration proposed to be paid or payable to Franchisee or any third party in connection with the proposed assignment shall be determined by a reputable independent appraiser Franchisor selects, and Franchisee and Franchisor equally share the expense of, whose determination will be final and binding on all parties.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, in the event of a dispute regarding the value of assets or rights proposed to be assigned, a reputable independent appraiser selected by Engel & Volkers will determine the value. This determination is considered final and binding for all parties involved.
The cost of the independent appraiser is equally shared between the Engel & Volkers franchisee and Engel & Volkers itself. This means that a franchisee considering an assignment needs to factor in the potential cost of an appraisal, especially if there's a disagreement on valuation.
This arrangement ensures an objective valuation process, as the appraiser is independent. However, the franchisee bears half the cost, which could be a significant expense depending on the complexity and value of the assets being appraised. Prospective franchisees should consider this potential expense when evaluating the financial implications of a possible future assignment of their franchise.