What does the Engel & Volkers franchise agreement state regarding the franchisee's responsibility for social security contributions for their staff?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
r 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'
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees are solely responsible for all employment-related liabilities, including social security contributions, for their staff. Engel & Volkers is not a party to the employment contracts between the franchisee and their staff or sales advisors. The franchisee has the exclusive responsibility for fulfilling these contracts, which includes deducting and remitting income taxes and social security contributions. Engel & Volkers is not considered the employer of the franchisee's employees, contractors, or sales advisors. Engel & Volkers does not exercise control over these individuals.
Engel & Volkers franchisees are responsible for hiring, setting schedules, establishing compensation rates, and paying all salaries, benefits, and employment-related liabilities, including workers' compensation insurance premiums, payroll taxes, Social Security contributions, Affordable Care Act contributions, and unemployment insurance premiums. The franchisee has the exclusive ability to discipline or terminate its employees, without any authority or ability of Engel & Volkers to do so.
This arrangement means that prospective Engel & Volkers franchisees must be prepared to handle all aspects of employment law and compliance. They need to budget for these costs and ensure they meet all legal requirements related to employment. Franchisees must also understand that any recommendations from Engel & Volkers regarding salaries or compensation are merely suggestions, and the franchisee is ultimately responsible for determining employee compensation.