What does the Engel & Volkers franchisee covenant regarding their relationship with the franchisor?

nt employer for Franchisee's employees. If such a claim is brought against Franchisor, Franchisor may use Franchisee's covenant in this Section as an absolute defense against such claim. Further, if any such claim is brought

against Franchisor or its affiliates or subsidiaries, or its current and former officers, directors, shareholders, partners, employees, predecessors, successors, attorneys, agents, representatives, and assigns, Franchisee will indemnify, defend, reimburse and hold harmless any such party from and against any such claim.

Franchisee hereby irrevocably affirms, attests and covenants its understanding that in no fashion is Franchisee, or may Franchisee be deemed to be, Franchisor's employee (under any theory or definition of "employee" or "employment") and that Franchisee's employees and contractors are employed or engaged exclusively by Franchisee and in no fashion is Franchisee or any such employee or contractor either employed, jointly employed or coemployed by Franchisor. Franchisee further affirms and attests that each of its employees is under the exclusive dominion and control of Franchisee and never under the direct or indirect control of Franchisor in any fashion whatsoever. Franchisee alone hires each of its employees; sets their schedules; establishes their compensation rates; and, pays all salaries, benefits and employment-related liabilities (workers' compensation insurance premiums/payroll taxes/Social Security contributions/Affordable Care Act contributions/unemployment insurance premiums). Franchisee alone has the ability to discipline or terminate its employees to the exclusion of Franchisor, which has no such authority or ability. Franchisee further attests and affirms that minimum staffing requirements established by Franchisor, if any, are solely for the purpose of ensuring that Franchisee's franchised Business is at all times staffed at those levels necessary to operate Franchisee's business in conformity with the ENGEL & VÖLKERS System and the services, standards of quality and efficiency, and other ENGEL & VÖLKERS brand attributes known to and desired by the consuming public and associated with the Trademarks. Franchisee affirms, warrants and understands that it may staff its franchised business with as many employees and contractors as it desires at any time so long as Franchisor's minimal staffing levels are achieved. Franchisee also affirms and attests that any recommendations it may receive from Franchisor regarding salaries, hourly wages or other compensation for employees are recommendations only, designed to assist it to efficiently operate its franchised Business, and that Franchisee is entirely free to disregard Franchisor's recommendations regarding such employee compensation. Moreover, Franchisee affirms and attests that any training provided by Franchisor for Franchisee's employees and contractors is geared to impart to those employees and contractors, with ultimate authority, the various procedures, protocols, systems and operations of a franchised business and in no fashion reflects any employment relationship between Franchisor and such employees and contractors. Finally, should it ever be asserted that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors in any private or government investigation, action, proceeding, arbitration or other setting, Franchisee irrevocably agrees to assist Franchisor in defending said allegation, including (if necessary) appearing at any venue requested by Franchisor to testify on Franchisor's behalf (and, as may be necessary, submitting itself to depositions, other appearances and/or preparing affidavits dismissive of any allegation that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors). To the extent Franchisor is the only named party in any such investigation, action, proceeding, arbitration or other setting to the exclusion of Franchisee, then should any such appearance by Franchisee be required or requested by Franchisor, Franchisor will recompense Franchisee the reasonable costs associated with Franchisee appearing at any such venue (including travel, lodging, meals and per diem salary or other compensation, if applicable).

• 6.6 Franchisee's Approved Location and Other Activities: Franchisee will use its best efforts to promote the ENGEL & VÖLKERS System. Furthermore, to maintain the integrity of the ENGEL & VÖLKERS System, Franchisee is required, in accordance with this Agreement, to submit its proposed Residential Real Estate Brokerage location and exterior brokerage designs (renderings) in advance to Franchisor for approval. Franchisee agrees and acknowledges that it must only have a Residential Real Estate Brokerage location and exterior brokerage designs (renderings) that are compliant with the ENGEL & VÖLKERS' System and System Documentation and that failure to do so will be a material breach of this Agreement. Franchisee hereby agrees not to encourage or permit any activities in its Residential Real Estate Brokerage which are incompatible with this Agreement, the ENGEL & VÖLKERS System or with the type of properties covered by this Agreement. Any exceptions to this rule shall require the prior written consent of Franchisor.
• 6.7 Laws and Regulations: Franchisee hereby agrees to observe and obey all federal, state and local laws, official regulations and decrees applicable in the state where its Approved Location is located, as well as anywhere else where Franchisee conducts business pursuant to this Agreement. This obligation includes licensing as a real estate broker, and any licenses and permits which it may require for the performance of its business. During the Term, Franchisee must provide Franchisor annually (no later than January 31 of each year) with a current copy of its real estate broker license. In particular, Franchisee agrees to abstain from any actions which Franchisor has expressly agreed not to perform in agreements with third parties or from which it is obliged to abstain under law. Franchisee understands and agrees that it shall be liable for any damage or loss incurred by Franchisor as a result of its failure to observe the foregoing undertakings.
• 6.8 Standard Contract Terms: Franchisor recommends that Franchisee use standard contract terms consistent with local law when providing residential real estate broker services to customers in connection with the types of property covered by this Agreement.
• 6.9 Operations Under the ENGEL & VÖLKERS Name: Franchisee hereby agrees to operate its Residential Real Estate Brokerage for the types of property covered by this Agreement solely under the ENGEL & VÖLKERS trade name (as defined in Section 4.5 and Appendix 1). Franchisee will independently negotiate and agree with each of its clients on terms for each real estate transaction(s) in which it represents such client.
• 6.10 Professional Standards and Code of Ethics: When providing real estate brokerage services for the types of property covered by this Agreement and otherwise in the operation of the Residential Real Estate Brokerage, Franchisee and its staff members and Sales Advisors will protect the reputation and value of the ENGEL & VÖLKERS System and Trademarks.

Source: Item 22 — CONTRACTS (FDD page 88)