Can an Engel & Volkers franchisee engage in activities in its Residential Real Estate Brokerage that are incompatible with the Engel & Volkers Agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees are prohibited from engaging in activities within their Residential Real Estate Brokerage that are incompatible with the Engel & Volkers Agreement. Franchisees must ensure their brokerage location and exterior designs comply with the Engel & Volkers system and documentation. Failure to comply is considered a material breach of the agreement.
Specifically, franchisees agree not to encourage or allow any activities in their brokerage that conflict with the agreement, the Engel & Volkers system, or the types of properties covered by the agreement. Any exceptions to this rule require prior written consent from Engel & Volkers. This ensures that all Engel & Volkers locations maintain a consistent brand image and operational standard.
This restriction is further reinforced by the non-competition clause, which prevents franchisees from providing residential or commercial real estate brokerage services that compete with the Engel & Volkers system during the term of the agreement. This includes direct or indirect involvement in competing services, either as an employee or in a self-employed capacity. Even the franchisee's immediate family members are restricted from providing competing services within a 75-mile radius of any approved location, unless Engel & Volkers provides prior written approval. These measures are in place to protect Engel & Volkers's market position and prevent franchisees from diverting business to competing ventures.
Engel & Volkers also reserves the right to purchase, merge, or affiliate with existing competitive or non-competitive franchise networks. This allows Engel & Volkers to expand its reach and market presence, even if it means operating competing businesses under different trademarks. Franchisees acknowledge that Engel & Volkers's rights to engage in other business activities are specifically reserved and cannot be diminished, ensuring Engel & Volkers retains control over its strategic direction and business activities.