Is an Engel & Volkers franchisee allowed to use Confidential Information in connection with any generative, artificial intelligence tool or program?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
15.1 Confidentiality During Term of Agreement: Franchisee hereby agrees to treat all business and operational information received by Franchisee, either directly or indirectly, from Franchisor and with respect to the ENGEL & VÖLKERS System, including that contained in the Integrated Product Suite to be provided pursuant to Section 7, and from the knowhow conveyed to Franchisee in the System Documentation (hereinafter called the "Confidential Information"), in strict confidence and not to divulge it to any third party. Franchisee agrees that, use of Confidential Information in connection with any generative, artificial intelligence tool or program is considered disclosure of such Confidential Information to a third party and constitutes a breach of this Section. However, Franchisee is permitted to use any information (a) which is, at the time of the disclosure to Franchisee, available to the general public; (b) which becomes available at a later date to the general public through no fault of Franchisee; or (c) which Franchisee can demonstrate was in its possession, through valid means, before receipt. Access to this Confidential Information by Franchisee's staff members and independent Sales Advisors must be restricted to the necessary minimum (need-to-know) and may only be used for purposes of performing under this Agreement. During the Term or afterwards, Franchisee agrees not use any
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees are explicitly prohibited from using Confidential Information in connection with any generative, artificial intelligence tool or program. The FDD states that such use is considered a disclosure of Confidential Information to a third party and constitutes a breach of the franchise agreement. This restriction applies to all business and operational information received from Engel & Volkers, including information within the Integrated Product Suite and System Documentation.
This policy reflects Engel & Volkers' concern about protecting its proprietary information and maintaining control over its brand standards. By preventing franchisees from using AI tools with Confidential Information, Engel & Volkers aims to minimize the risk of unauthorized disclosure or misuse of sensitive data. This is a stricter stance than some other franchises, which may allow limited AI use under specific guidelines.
For a prospective Engel & Volkers franchisee, this means that they must be extremely cautious about using AI tools in their business operations. They need to ensure that no Confidential Information is inputted into these tools, as doing so could result in a breach of contract. Franchisees should seek clarification from Engel & Volkers on what constitutes Confidential Information and what AI tools are permissible to use, if any, to avoid unintentional violations. Engel & Volkers also requires franchisees to impose confidentiality obligations on their shareholders, partners, members, officers, directors, managers, staff members, and Sales Advisors, by having such persons execute Engel & Volkers' form of Confidentiality Agreement and Covenant Not to Compete.