Is the Engel & Volkers franchisee granted an exclusive or non-exclusive franchise to use the trademarks?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
4.3 Franchisee's Rights: Franchisee is hereby granted a non-exclusive franchise for the Term to use the Trademarks listed in Section 4.1 solely for the purpose of operating its Residential Real Estate Brokerage under this Agreement.
4.2 Extent of Franchisor's Rights: Franchisor has the non-exclusive right and license to use the Trademark ENGEL & VÖLKERS® and other Trademarks in the United States solely for the purpose of operating its own Residential Real Estate Brokerage and granting third parties the right to use the Trademarks to operate a Residential Real Estate Brokerage.
2.1 Grant of Franchise: Subject to the terms of this Agreement, Franchisor hereby grants to Franchisee the non-exclusive right to establish and operate an ENGEL & VÖLKERS® residential real estate brokerage at the Approved Location for the provision of real estate brokerage services with respect to residential properties of the type permitted under Section 2.2 using the ENGEL & VÖLKERS System and Trademarks (the "Residential Real Estate Brokerage").
2.4.1 Franchisor reserves all rights not specifically granted to Franchisee herein. This Agreement shall not limit the right of Franchisor or its affiliates to use or franchise the ENGEL & VÖLKERS System or Trademarks, or to engage in or franchise any business activity, including, without limitation, (i) the operation or franchising of a real estate brokerage under the Trademarks and using the ENGEL & VÖLKERS
System at any location outside the Protected Area or the operation or franchising of a commercial real estate brokerage at any location inside the Protected Area (other than that Franchisee may offer the limited Permitted Commercial Services as set forth above), and/or (ii) under any other trade name, trademark or service mark now or hereafter owned by or franchised to Franchisor or its affiliates, at any location outside the Protected Area, or at any location inside the Protected Area for commercial property transactions.
Although this Agreement is granting a franchise for a Residential Real Estate Brokerage, Franchisee may also provide real estate brokerage services for commercial properties under the residential Trademarks, provided: (i) the commercial real estate brokerage services are offered as a service ancillary to the provision of real estate brokerage services for residential properties, (ii) Franchisee does not hold itself out as providing commercial real
estate brokerage services as its principal business or as being a stand-alone provider solely of commercial services, and (iii) Franchisee's aggregate listings on a unit basis of commercial properties does not exceed five percent (5%) of all its listings in any calendar year during the term of Franchisee's agreement ("Permitted Commercial Services").
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the franchisee is granted a non-exclusive franchise to use the trademarks. Specifically, the franchisee's rights to use the trademarks are solely for operating a residential real estate brokerage under the terms of the franchise agreement. This means Engel & Volkers retains the right to use the trademarks themselves and to allow other franchisees to use them as well. Engel & Volkers also has the non-exclusive right to use the Engel & Völkers trademark to operate its own residential real estate brokerage and to grant third parties the right to use the trademarks to operate a Residential Real Estate Brokerage.
This non-exclusive grant has several implications for a prospective Engel & Volkers franchisee. Engel & Volkers reserves all rights not specifically granted to the franchisee, including the right to franchise others and engage in any business activity under the trademarks outside the franchisee's protected area. Engel & Volkers can also operate or franchise a commercial real estate brokerage inside the franchisee's protected area. The franchisee's right to offer commercial real estate brokerage services is limited to being ancillary to residential services, and commercial listings cannot exceed 5% of all listings in a calendar year.
Engel & Volkers also reserves the right to purchase, merge, acquire, or affiliate with any existing competitive or non-competitive business, and to operate or franchise those businesses under the Engel & Volkers trademarks, even within the franchisee's protected area. The franchisee acknowledges that Engel & Volkers's rights to use and franchise the Engel & Volkers system and trademarks pre-date the agreement and are not limited or changed by the agreement's terms. This extensive reservation of rights means that Engel & Volkers retains significant control over the use of its trademarks and the development of its business, which could impact a franchisee's market and competitive landscape.
In practical terms, while an Engel & Volkers franchisee benefits from using the established Engel & Volkers trademarks, they do not have exclusive control over their use within their territory. Engel & Volkers can license the trademarks to others, operate competing businesses, or even introduce new brands that could compete with the franchisee's business. Therefore, prospective franchisees should carefully consider the potential impact of this non-exclusive grant and the extensive rights retained by Engel & Volkers when evaluating the franchise opportunity.