In the event of a default by the Engel & Volkers franchisee, what options does the franchisor have?

hisee, the franchised Business or any affiliate or Guarantor thereof; Franchisee, any affiliate of Franchisee or any Guarantor are dissolved; execution is levied against Franchisee, the franchised Business, any affiliate or Guarantor thereof and/or the property of any of the foregoing; the property of the franchised Business is sold after levy thereon by any governmental body or agency, sheriff, marshal or other person authorized under federal, state and/or local law; or, if Franchisee is a business entity, its governing body adopts any resolution or otherwise authorizes action to approve any of the foregoing activities.

• 20.3 Termination by Franchisor Without Opportunity to Cure: Franchisee shall be deemed to be in default under this Agreement, and Franchisor may, at its option, terminate this Agreement and all rights granted herein effective immediately or reduce or eliminate the Protected Area by written notice to Franchisee, without giving Franchisee an opportunity to cure the default, if Franchisee either:

  • 20.3.1 fails to timely find and secure Franchisor approval of its Approved Location in accordance with the provisions of Section 3.1;
  • 20.3.2 fails to start operating its Engel & Völkers Residential Real Estate Brokerage by the Opening Date;
  • 20.3.3 fails to operate its Residential Real Estate Brokerage for seven (7) consecutive days or otherwise abandons its Residential Real Estate Brokerage, or uses the Residential Real Estate Brokerage for any purpose prohibited by Section 3.2;
  • 20.3.4 falls more than thirty (30) days into arrears with payments due to Franchisor or one of its affiliates;
  • 20.3.5 commits a breach of the confidentiality undertakings set forth in Section 15;
  • 20.3.6 commits a breach of the non-competition provisions set forth in Section 16 or one of the Principals commits a breach of the Confidentiality Agreement and Covenant Not To Compete;
  • 20.3.7 is, or one of its Principals, business managers, owners, members, shareholders, or directors, commits or has been committing an act of moral turpitude or engages or has engaged in other acts that are likely to have a materially adverse effect on the ENGEL & VÖLKERS System, the Trademarks, the goodwill associated with the Trademarks or Franchisor's interest in the ENGEL & VÖLKERS System or Trademarks, or is or has been convicted of, or plead or has plead either guilty or no contest to, a felony, fraud, crime involving moral turpitude, or any other crime or lesser offense which Franchisor reasonably believes is related to Franchisee's duties under this Agreement and/or Franchisee's operation of the franchised Business or is likely to have an adverse effect on the ENGEL & VÖLKERS System, the Trademarks, the goodwill associated with the Trademarks or Franchisor's interest in the ENGEL & VÖLKERS System or Trademarks;
  • 20.3.8 is liquidated;
  • 20.3.9 fails to obtain or maintain the licenses required for its business operation, including not having at any time a broker of record who holds the broker license required at the Approved Location;
  • 20.3.10 violates Section 26.11 (Compliance with Laws) of this Agreement;
  • 20.3.11 makes a willful misrepresentation or does not make a material disclosure required by any governmental authority regarding any matter involving or affecting Franchisee's obligations under this Agreement or the operations of the franchised Business;

• 20.3.12 is, or any of Franchisee's affiliates is, in default under any franchise agreement or other agreement with Franchisor or its affiliates, which default is: (i) not curable; or (ii) is curable and a notice to cure has been provided to Franchisee or Franchisee's affiliate, as the case may be, and the default has not cured such default within the applicable cure period. Furthermore, any default under this Agreement by Franchisee will be deemed a default under any and all agreements between Franchisor or its affiliates on one hand, and Franchisee or its affiliates on the other hand, permitting Franchisor or its affiliate that is party to any such agreement to terminate it in the same manner provided for in this Agreement for termination hereof;

• 20.3.13 omitted or misrepresented any material fact in the information Franchise furnished to Franchisor in connection with Franchisor's decision to enter into this Agreement;

• 20.3.14 agrees with Franchisor in a mutually signed writing to terminate this Agreement;

• 20.3.15 purports or, if Franchisee is a business entity, any owner or principal of Franchisee purports, to transfer any rights or obligations under this Agreement, any interest in Franchisee or in the franchised Business to any third party in violation of the terms of this Agreement;

• 20.3.16 uses or duplicates any aspects of the ENGEL & VÖLKERS System, services, programs or products in an unauthorized fashion;

• 20.3.17 engages in any business or markets any service or product under a name or mark which, in Franchisor's opinion, is confusingly similar to the Trademarks;

• 20.3.18 abandons or ceases to operate the franchised Business and/or any ENGEL & VÖLKERS Residential Real Estate Brokerage operated by Franchisee or its affiliates;

• 20.3.19 knowingly conceals revenues, maintains false books or records, falsifies information or otherwise defrauds or makes false representation to Franchisor or submits any substantially false report to Franchisor;

• 20.3.20 does not maintain the financial records required by Section 13 of this Agreement;

• 20.3.21 is found by Franchisor or its designees, after conducting an audit of the franchised Business, that any periodic report or statement which Franchisee submitted to Franchisor understated Franchisee's Gross Revenues by 2% or more, at least three times within any 36-month period, or by 5% or more for the applicable reporting period;

• 20.3.22 refuses Franchisor permission to inspect, or to conduct an operational and/or financial audit of, the franchised Business or any other Franchisee-operated ENGEL & VÖLKERS Residential Real Estate Brokerages.

• 20.3.23 takes, withholds, misdirects or appropriates for its own use any funds withheld from Franchisee's employees' wages which by law should have been set aside for the franchised Business' employee taxes, FICA, insurance or benefits or

wrongfully takes or appropriates for its own use ENGEL & VÖLKERS' or Franchisor's property or funds, or systematically fails to deal fairly and honestly with its employees, contractors, customers, Sales Advisors or suppliers, or knowingly permits or, having discovered the facts, fails to take any action against, or to discharge, an agent, servant or employee who has embezzled ENGEL & VÖLKERS' or Franchisor's funds or property or that of any customers/clients or others;

• 20.3.24 after curing a default which is subject to cure under Section 20.4 below, Franchisee commits the same act of default again within six (6) months;

• 20.3.25 interferes or attempts to interfere in any manner with Franchisor's or ENGEL & VÖLKERS' contractual relations and/or Franchisor's or ENGEL & VÖLKERS' relationships with other ENGEL & VÖLKERS System franchisees, any supplier of Franchisee, Franchisor, ENGEL & VÖLKERS or other franchisees, any governmental or quasi-governmental authority, Franchisor's or ENGEL & VÖLKERS' customers/clients, employees or advertising agencies, or any third parties;

• 20.3.26 engages in any act or practice, which subjects Franchisee and/or Franchisor to widespread publicity, ridicule or derision;

• 20.3.27 breaches the provisions of this Agreement relating to advertising standards (including but not limited to corporate or brand identity) and does not cure this breach within three (3) days following written notice from Franchisor;

• 20.3.28 any license or governmental authorization necessary for the operation of the franchised Business is revoked or terminated; or

• 20.3.29 engages in any act or conduct, or fails to engage in any act or conduct, which under this Agreement specifically authorizes Franchisor to terminate this Agreement immediately upon notice to Franchisee.

• 20.4 Termination by Franchisor After Opportunity to Cure: Except as specifically provided elsewhere in this Agreement, Franchisee will have thirty (30) calendar days following Franchisor's delivery of written notice to Franchisee to cure any default under this Agreement and provide Franchisor with evidence that Franchisee has done so. If Franchisee has not cured any default within that time, this Agreement will terminate immediately upon expiration of the thirty (30) day period, unless Franchisor otherwise expressly agrees in writing. Franchisee will be in default of this Agreement for any failure to comply with any of its obligations under this Agreement, as supplemented by the System Documentation, including, without limitation, the obligation to make any required payments to Franchisor or its affiliates when due. Examples (without limitation) of defaults curable within thirty (30) days after notice include if Franchisee:

  • 20.4.1 is unable to properly manage its franchised Business operation for a prolonged period;
  • 20.4.2 intentionally fails to make use of material features of the ENGEL & VÖLKERS System;

• 20.4.3 terminates the lease for its Residential Real Estate Brokerage or such lease expires or is otherwise terminated;

• 20.4.4 commits a breach of Section 23.2 (Ownership in Franchisee's Company);

• 20.4.5 or the Estate fails to comply with Section 22.4 (Assignment Upon Death or Disability);

• 20.4.6 or any of its affiliates is in default under any other franchise agreement or other agreement with Franchisor or one of its affiliates, which is not curable, or, if such default is curable and a notice to cure has been provided to Franchisee or its applicable affiliate, Franchisee or its applicable affiliate has not cured such default within the applicable cure period.

• 20.5 Optional Remedy**:** If Franchisee fails to timely pay any amounts due to Franchisor or one of its affiliates, or if Franchisee is in material breach of any obligation under this Agreement, Franchisor may, in addition to or in lieu of its remedy under Section 20.4 or otherwise provided in this Agreement: (i) withhold Franchisee's access to the Integrated Product Suite described in Section 7 and any other services or goods, such as the GG Magazine, that Franchisor or its affiliates are obligated to provide hereunder until such time as Franchisee's payments are current; and/or (ii) rescind any terms to this Agreement that were negotiated between the parties, including reducing Franchisee's Protected Area. Examples of material breaches of Franchisee's obligations under this Agreement include failure to timely pay any amounts due when payable and failure to timely submit reports required hereunder.

Source: Item 22 — CONTRACTS (FDD page 88)