Does the Engel & Volkers franchise agreement grant a franchise for a Commercial Real Estate Brokerage?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Although this Agreement is granting a franchise for a Residential Real Estate Brokerage, Franchisee may also provide real estate brokerage services for commercial properties under the residential Trademarks, provided: (i) the commercial real estate brokerage services are offered as a service ancillary to the provision of real estate brokerage services for residential properties, (ii) Franchisee does not hold itself out as providing commercial real estate brokerage services as its principal business or as being a stand-alone provider solely of commercial services, and (iii) Franchisee's aggregate listings on a unit basis of commercial properties does not exceed five percent (5%) of all its listings in any calendar year during the term of Franchisee's agreement ("Permitted Commercial Services"). For purposes of clarity, the definition of Permitted Commercial Services does not provide Franchisee with a right to conduct business under any other Trademarks, other than the residential Trademarks.
Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 62–63)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchise agreement primarily grants the right to operate a residential real estate brokerage. However, franchisees are permitted to provide commercial real estate brokerage services under specific conditions.
Specifically, Engel & Volkers franchisees can offer commercial real estate services only if they are ancillary to their residential services. This means that commercial services cannot be the franchisee's primary business focus, nor can they present themselves as a standalone provider of commercial services. Furthermore, the aggregate listings of commercial properties must not exceed 5% of all listings in any calendar year during the term of the Franchise Agreement.
In essence, while the Engel & Volkers franchise is centered around residential real estate, there is a limited allowance for commercial transactions, provided they remain a small portion of the overall business. This offers franchisees some flexibility to serve clients with commercial needs without deviating from the core residential focus of the franchise.