What does the Engel & Volkers franchise agreement state about the franchisee's responsibility for the actions of their employees?

support, advice or resources Franchisor provides to Franchisee in connection with the franchised Business is solely for the purpose of protecting the ENGEL & VÖLKERS System, including the Trademarks, and goodwill associated with the ENGEL & VÖLKERS System and assisting Franchisee in the operation of the franchised Business, and not for the purpose of controlling or in any way exercising or exerting control over Franchisee's decisions or the day-to-day operation of the franchised Business, including Franchisee's personnel-related decisions.

• 6.2 Personnel: Franchisee hereby agrees to employ only qualified personnel with background, experience and credentials customary under best practices and standards in the real estate brokerage industry. Franchisee and, if an entity, at least one of its officers, partners and/or managers, must be licensed as a real estate broker, and every employee, contractor, or Sales Advisor who is involved in real estate activities for Franchisee shall have a real estate broker, salesperson or other appropriate license, if and as required by applicable law, rules or regulations. These employees, contractors, and Sales Advisors must have attended an appropriate training course conducted by Franchisor and have passed related tests. Franchisee is responsible for ensuring that its real estate brokerage is open during local normal business hours for residential real estate brokerages. Franchisee shall be responsible for ensuring that its obligations under this Agreement are observed by its employees,

contractors, and Sales Advisors. Franchisee understands and agrees that Franchisor is not a party to Franchisee's employment contracts (neither as sole, nor as a joint employer) with its own staff and Sales Advisors, and Franchisee shall be solely liable for fulfillment of these contracts in every respect (e.g., deduction and remittance of income taxes, social security contributions, etc.). None of Franchisee's employees, contractors or Sales Advisors will be considered to be Franchisor's employees and Franchisee acknowledges that Franchisor is not in a position to exercise control over Franchisee's employees, contractors or Sales Advisors. Neither Franchisee nor any of its employees, contractors or Sales Advisors whose compensation it pays may in any way, directly or indirectly, expressly or by implication, be construed to be Franchisor's employee for any purpose, including with respect to any mandated or other insurance coverage, tax or contributions, or requirements pertaining to withholdings, levied or fixed by any city, state or federal governmental agency. Franchisee expressly agrees, and will never contend otherwise, that Franchisor's authority under this Agreement to certify certain of Franchisee's employees, contractors or Sales Advisors for qualification to perform certain functions for Franchisee's franchised Business does not directly or indirectly vest in Franchisor the power to hire, fire or control any such employee, contractor or Sales Advisor.

• 6.3 Franchisee acknowledges and agrees, and will never contend otherwise, that Franchisee alone will exercise day-to-day control over all operations, activities and elements of its franchised Business hereunder and that under no circumstance shall Franchisor do so or be deemed to do so. Franchisee further acknowledges and agrees, and will never contend otherwise, that the various requirements, restrictions, prohibitions, specifications and procedures of the ENGEL & VÖLKERS System which Franchisee is required to comply with under this Agreement, whether set forth in the System Documentation or otherwise, do not directly or indirectly constitute, suggest, infer or imply that Franchisor controls any aspect or element of the day-to-day operations of Franchisee's franchised Business, which Franchisee alone controls, but only constitute standards Franchisee must adhere to when exercising Franchisee's control of the day-to-day operations of its franchised Business.
• 6.4 Franchisee may not, without Franchisor's prior, express, written approval, obligate Franchisor for any expenses, liabilities or other obligations, other than as specifically provided in this Agreement. Except as expressly provided in this Agreement, Franchisor may not control or have access to Franchisee's funds or the expenditure of Franchisee's funds or in any other way exercise dominion or control over Franchisee's business. Except as otherwise expressly authorized by this Agreement, neither party will make any express or implied agreements, warranties, guarantees or representations or incur any debt in the name of or on behalf of the other party, or represent that the relationship between Franchisor and Franchisee is other than that of franchisor and franchisee.

Source: Item 22 — CONTRACTS (FDD page 88)