What document must the Principals of an Engel & Volkers franchisee sign, as outlined in Appendix 4?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 23.1 Guarantee: If Franchisee is a business entity, e.g., corporation, partnership or limited liability company, Franchisee's principal owners must be named in Appendix 5 (hereinafter called the "Principals"). A Principal is an "owner" that owns ten percent (10%) or more of Franchisee. The Principals will each sign the Principal's Guarantee and Assumption of Obligations attached as Appendix 4 to this Agreement. If the Principal is in a community property state or for other reasons determined by Franchisor, the Principal's spouse may also be required to sign the Guarantee form. If any Principals change, Franchisee must notify and provide an updated list of all Principals to Franchisor immediately.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if the franchisee is a business entity such as a corporation, partnership, or limited liability company, the principal owners, referred to as "Principals" in Appendix 5, must sign a specific document. A Principal is defined as an owner with ten percent (10%) or more ownership in the Engel & Volkers franchise.
The document that these Principals are required to sign is the "Principal's Guarantee and Assumption of Obligations," which is attached as Appendix 4 to the Franchise Agreement. This guarantee ensures that the Principals are personally bound by the obligations and duties outlined in the Franchise Agreement.
Furthermore, the FDD states that if a Principal resides in a community property state, or under other circumstances determined by Engel & Volkers, the Principal's spouse may also be required to sign the Guarantee form. This requirement ensures that Engel & Volkers has recourse to the personal assets of the Principals and potentially their spouses, providing an additional layer of security for the franchisor.