Does the Engel & Volkers exclusivity agreement prevent Engel & Volkers, its affiliates, or other franchisees from soliciting clients within a franchisee's Protected Area?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Generally, you will receive the right to operate an Engel & Völkers Residential Real Estate Brokerage at a specific location as specified in Appendix 1 of your Franchise Agreement ("Approved Location"). You will have exclusivity with regard to your Engel & Völkers Residential Real Estate Brokerage in a specific area called the "Protected Area", which will be an area defined by US postal zip codes. By "Exclusivity" we mean that we will not open or grant to anyone else the right to open another Engel & Völkers Residential Real Estate Brokerage in your Protected Area during the term of your Franchise Agreement. "Exclusivity" does not mean that we, our affiliates, or other franchisees are prevented from soliciting clients, marketing our residential real estate brokerage services, or concluding real estate transactions in your Protected Area.
Source: Item 12 — TERRITORY (FDD pages 54–56)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the exclusivity agreement for a Protected Area does not prevent Engel & Volkers, its affiliates, or other franchisees from soliciting clients, marketing services, or concluding real estate transactions within that Protected Area. The exclusivity only ensures that Engel & Volkers will not open or grant another party the right to open another Engel & Volkers Residential Real Estate Brokerage within the franchisee's Protected Area during the term of the Franchise Agreement.
This means that while an Engel & Volkers franchisee has a Protected Area where no new Engel & Volkers Residential Real Estate Brokerage can be established, they will still face competition from Engel & Volkers itself, its affiliates, and other franchisees who are allowed to solicit clients and conduct business within that area. This is a common practice in franchising, where franchisors often retain the right to operate or allow others to operate within a franchisee's territory through different channels or brands.
Engel & Volkers and its affiliates also retain the right to use or license the Engel & Volkers System and Trademarks, and to engage in or franchise any business activity outside the franchisee's Protected Area. They can also operate or license a real estate agency business under the Engel & Volkers Trademarks and using the Engel & Volkers System at any location inside the Protected Area for commercial property transactions. Engel & Volkers can also use other channels of distribution, such as the Internet, to make sales within the Protected Area under its principal Trademarks or different Trademarks for commercial property transactions.
Prospective Engel & Volkers franchisees should be aware that the Protected Area provides limited protection against competition. While another Engel & Volkers Residential Real Estate Brokerage cannot be opened in the Protected Area, Engel & Volkers, its affiliates, and other franchisees can still actively solicit clients and conduct real estate transactions within the area. This could impact the franchisee's ability to capture market share and achieve their revenue goals.