What document must all Principals sign following the signature page of the Engel & Volkers Franchise Agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Each owner of 10% or more of a franchisee that is an entity (we call them the "Principals") must sign the Principal's Guarantee and Assumption of Obligations, attached as Appendix 4 to the Franchise Agreement and the Principal's Confidentiality Agreement and Covenants Not to Compete, attached as Appendix 3 to the Franchise Agreement. If the Principal is in a community property state, his or her spouse or domestic partner may also have to sign the Guarantee form. All Principals must also sign the Principal's Acknowledgement following the signature page of the Franchise Agreement, agreeing to bound by specific rights and duties mentioned in that Franchise Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 61–62)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, after the signature page of the Franchise Agreement, all Principals must sign a Principal's Acknowledgment. Principals are defined as owners with 10% or more ownership in the franchisee entity. This acknowledgment signifies their acceptance of and agreement to be bound by the specific rights and duties outlined in the Franchise Agreement.
In addition to the Principal's Acknowledgment, Principals are also required to sign a Principal's Guarantee and Assumption of Obligations, which is attached as Appendix 4 to Exhibit C of the Franchise Agreement. This guarantee ensures that the Principals will fulfill the franchisee's obligations, including payment obligations, under the Franchise Agreement. If a Principal resides in a community property state, their spouse may also be required to sign the Guarantee form.
Furthermore, Principals must agree to maintain their ownership interest in the company and obtain Engel & Volkers' consent before disposing of their interest. These requirements ensure that the Principals remain committed to the franchise and its operations throughout the term of the agreement. The Principal's Confidentiality Agreement and Covenants Not to Compete, attached as Appendix 3 to the Franchise Agreement, must also be signed by each owner of 10% or more of a franchisee.