Does the Engel & Volkers franchise agreement prohibit franchisees from being involved in business arrangements or other transactions with any country or individual that is subject to an embargo?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
App. 1 et seq., or any Executive Orders or regulations promulgated thereunder (including Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, and the Specially Designated Nationals and Blocked Persons List), the Patriot Act, or any other law, rule or regulation pertaining to immigration or terrorism ("Anti-Terrorism Laws"); is directly or indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States government or by any individual that is subject to an embargo imposed by the United States government; is acting on behalf of any country or individual that is subject to such an embargo; or, is involved in business arrangements or other transactions with any country or individual that is subject to an embargo.
Franchisee agrees to immediately notify Franchisor in writing upon the occurrence of any event which would render the foregoing representations and warranties incorrect.
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
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the franchise agreement addresses compliance with anti-terrorism laws and restrictions related to embargoed countries or individuals. Specifically, the agreement states that the franchisee cannot be directly or indirectly owned or controlled by the government of any country subject to a U.S. embargo, nor can they be involved in business arrangements or transactions with any such country or individual. This is to ensure compliance with U.S. laws and regulations concerning international trade and security. The franchisee must also notify Engel & Volkers immediately if any event occurs that would make these representations incorrect.
Engel & Volkers also prohibits franchisees from transferring, assigning, or otherwise disposing of the franchise agreement to a "Specially Designated National or Blocked Person," which is defined as someone designated by the Office of Foreign Assets Control (OFAC). This provision is in place to prevent any dealings with individuals or entities that are on the U.S. government's list of restricted parties.
For a prospective Engel & Volkers franchisee, this means they must ensure they and their business operations are fully compliant with all U.S. laws related to embargoes and anti-terrorism. They must conduct due diligence to verify that they are not engaging in any prohibited transactions or relationships. Failure to comply with these regulations could result in termination of the franchise agreement and potential legal consequences.