Is an Engel & Volkers franchisee allowed to transfer or assign the franchise agreement to a "Specially Designated National or Blocked Person"?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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
time as a "specially designated national or blocked person" or similar status; (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; or, (iii) a person or entity otherwise identified by any government or legal authority as a person with whom Franchisee (or any of its owners or affiliates) or Franchisor' (or any of their respective owners or affiliates) are prohibited from transacting business. Franchisee further agrees that Franchisee will not hire, retain, employ or otherwise engage the services of any individual or entity in contravention of Anti-Terrorism Laws or any other legally prohibited individual or entity. Neither Franchisee nor its Principals shall engage in any activity that would expose Franchisor to a risk of criminal or civil penalties under applicable United States law. Any violation of the Anti-Terrorism Laws by Franchisee or its Principals, or any blocking of Franchisee's or its Principals' assets under the Anti-Terrorism Laws, shall constitute good cause for immediate termination of this Agreement and any other agreement Franchisee has entered into with Franchisor or any of its affiliates.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, a franchisee is prohibited from transferring or assigning the franchise agreement to a "Specially Designated National or Blocked Person." The FDD explicitly states that franchisees cannot allow, effect, or sustain any transfer, assignment, or other disposition of the agreement to such individuals or entities, or to any entity in which such a person has an interest.
The term "Specially Designated National or Blocked Person" is defined within the agreement as (i) a person or entity designated by the Office of Foreign Assets Control (OFAC) or any successor agency as a "specially designated national or blocked person"; (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; or (iii) a person or entity otherwise identified by any government or legal authority as a person with whom the franchisee or franchisor are prohibited from transacting business.
This restriction is in place to ensure compliance with Anti-Terrorism Laws and to prevent Engel & Volkers from being exposed to risks of criminal or civil penalties under United States law. Any violation of these laws by a franchisee or the blocking of their assets under these laws constitutes grounds for immediate termination of the franchise agreement. This clause highlights the importance Engel & Volkers places on adhering to legal and ethical standards, and the potential consequences for franchisees who fail to comply.