Is the Engel & Volkers franchise relationship considered an arms' length, commercial business relationship?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
26.13 Acknowledgements of Franchisee:
Franchisee represents, warrants and acknowledges the following statements to be true and correct as of the date Franchisee signs this Agreement, and to be binding on Franchisee:
26.13.1 Franchisee has conducted an independent investigation of the business contemplated by this Agreement.
26.13.2 Franchisee represents that, as an inducement to Franchisor's entry into this Agreement, it has made no misrepresentations in obtaining this agreement.
26.13.3 Franchisee is aware of the fact that other present or future franchisees may operate under different forms of agreement(s), and consequently that Franchisor's obligations and rights with respect to its various franchisees may differ materially
in certain circumstances. Any such variances Franchisor determines for other franchisees, do not grant Franchisee any rights or entitle Franchisee to request a similar modification under this Agreement.
26.13.4 No representation or statement has been made by Franchisor or its affiliates (or any of its or their officers, directors, managers, employees, agents or salespersons) regarding Franchisee's anticipated income, earnings and growth of the franchised Business or that of the ENGEL & VÖLKERS System, or the viability of the business opportunity being offered under this Agreement.
26.13.5 Before executing this Agreement, Franchisee has had the opportunity to contact all of Franchisor's existing franchisees.
26.13.6 Franchisee has received from Franchisor a copy of Franchisor's franchise disclosure document, together with a copy of all proposed agreements relating to the sale of the franchise, at least fourteen (14) calendar days before the execution of this Agreement or at least fourteen (14) calendar days before the payment by Franchisee to Franchisor any consideration in connection with the sale or proposed sale of the franchise granted by this Agreement.
26.13.7 Franchisee understands that the franchise relationship is an arms' length, commercial business relationship in which each party acts in its own interest.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchise relationship is explicitly defined as an arms' length, commercial business relationship. This means that Engel & Volkers and its franchisees are considered independent parties, each acting in their own best interest. This acknowledgement is part of the agreement that the franchisee signs, confirming their understanding of the nature of the relationship.
This type of relationship is typical in franchising, where the franchisee operates their business independently while adhering to the franchisor's system and standards. The franchisee acknowledges that they have conducted their own investigation of the business opportunity and have not relied on any representations made by Engel & Volkers regarding potential income, earnings, or growth. This underscores the importance of due diligence on the franchisee's part.
Furthermore, the FDD states that Engel & Volkers may have different agreements with other franchisees, and any variances in those agreements do not grant the franchisee the right to request similar modifications. This highlights that the franchise agreement is specific to each franchisee and that Engel & Volkers retains the right to adapt its system and agreements as it sees fit. This acknowledgement reinforces the commercial nature of the relationship, where each party has specific rights and obligations as defined in their individual agreements.