How does the Engel & Volkers franchise agreement define a "Specially Designated National or Blocked Person"?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary in this Agreement, Franchisee may not allow, effect or sustain any transfer, assignment or other disposition of this Agreement to a "Specially Designated National or Blocked Person" (as defined below) or to an entity in which a Specially Designated National or Blocked Person has an interest.
For the purposes of this Agreement, "Specially Designated National or Blocked Person" means: (i) a person or entity designated by OFAC (or any successor officer agency of the U.S. government) from time to
time as a "specially designated national or blocked person" or similar status; (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; or, (iii) a person or entity otherwise identified by any government or legal authority as a person with whom Franchisee (or any of its owners or affiliates) or Franchisor' (or any of their respective owners or affiliates) are prohibited from transacting business. Franchisee further agrees that Franchisee will not hire, retain, employ or otherwise engage the services of any individual or entity in contravention of Anti-Terrorism Laws or any other legally prohibited individual or entity. Neither Franchisee nor its Principals shall engage in any activity that would expose Franchisor to a risk of criminal or civil penalties under applicable United States law. Any violation of the Anti-Terrorism Laws by Franchisee or its Principals, or any blocking of Franchisee's or its Principals' assets under the Anti-Terrorism Laws, shall constitute good cause for immediate termination of this Agreement and any other agreement Franchisee has entered into with Franchisor or any of its affiliates.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, a "Specially Designated National or Blocked Person" is defined within the context of the franchise agreement to ensure compliance with anti-terrorism laws and U.S. government regulations. Engel & Volkers prohibits franchisees from transferring, assigning, or otherwise disposing of the agreement to any individual or entity falling under this designation.
The definition encompasses three categories: (i) individuals or entities specifically designated by the Office of Foreign Assets Control (OFAC) or its successor as a "specially designated national or blocked person"; (ii) those described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; and (iii) any person or entity identified by a government or legal authority as someone with whom the franchisee or Engel & Volkers is prohibited from conducting business.
Engel & Volkers also requires franchisees to avoid hiring or engaging the services of any individual or entity in violation of anti-terrorism laws. Franchisees and their principals must not participate in any activity that could expose Engel & Volkers to criminal or civil penalties under U.S. law. Any breach of these anti-terrorism laws or the blocking of assets under these laws constitutes grounds for immediate termination of the franchise agreement.