Does an Engel & Volkers franchisee have an obligation to renew their franchise agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.2.5 Franchisee shall have paid to Franchisor a renewal fee in an amount equal to fifty percent (50%) of the Initial Franchise Fee described in Section 14.1 hereof.
- 19.3 Any continuance of business relations between Franchisor and Franchisee after the termination or expiration of this Agreement will not constitute, and may not be construed as, a reinstatement, renewal, extension or continuation of this Agreement unless Franchisee and Franchisor expressly agree in writing to any such renewal, extension or continuation. If Franchisee continues to operate the franchised Business after the termination or expiration of the Term, without any further agreement in writing signed by Franchisor, such continuation will be a violation of Franchisor's rights to the ENGEL & VÖLKERS System and the Trademarks, provided that Franchisee's obligations as set forth in this Agreement and Franchisor's rights will continue to apply until such time that Franchisee ceases operations under the ENGEL & VÖLKERS System and the Trademarks.
- 19.4 Term: Collectively, the Initial Term and the Renewal Term (if there is one) are called the "Term".
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees are not obligated to renew their franchise agreement. The agreement outlines the conditions for renewal, stating that any continuation of the business relationship after the agreement's expiration does not constitute an automatic renewal unless both Engel & Volkers and the franchisee expressly agree to it in writing.
If an Engel & Volkers franchisee continues to operate the franchised business after the term expires without a written agreement from the franchisor, it's considered a violation of Engel & Volkers' rights to their system and trademarks. However, the franchisee's obligations and Engel & Volkers' rights still apply until the franchisee ceases operations under the Engel & Volkers system and trademarks.
The document also defines the 'Term' as the Initial Term and the Renewal Term, if there is one, further emphasizing that renewal is conditional and not obligatory. To renew the franchise agreement, the franchisee must pay Engel & Volkers a renewal fee equal to fifty percent of the initial franchise fee.