Is an Engel & Volkers franchisee permitted to provide real estate brokerage services for commercial properties?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
d risks, has read Franchisor's Franchise Disclosure Document, and has not relied on any representations not set forth in this Agreement. Aware of the relevant facts, Franchisee desires to enter into this Agreement to obtain a franchise to use the ENGEL & VÖLKERS System to operate a residential real estate brokerage at the Approved Location. Franchisee agrees that it will bear the financial risk involved in operation of the real estate brokerage.
2. Nature of Franchise
- 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").
- 2.2 Types of Property: Franchisee may provide real estate brokerage services only for residential properties consisting of a house or building (including an apartment within a multi-family building) or undeveloped land, including leaseholds, vacation and resort residential units, cooperatives, condominiums, and any other form of real estate for which a residential real estate brokerage license is required under applicable law.
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, franchisees are primarily granted the right to operate a residential real estate brokerage. However, franchisees may also provide real estate brokerage services for commercial properties under specific conditions. These commercial real estate brokerage services must be offered as a service ancillary to the provision of real estate brokerage services for residential properties.
Engel & Volkers franchisees cannot present themselves as a principal business or a stand-alone provider solely of commercial services. Furthermore, the franchisee's aggregate listings of commercial properties cannot exceed five percent of all its listings in any calendar year during the term of the agreement.
This allowance for commercial services is termed "Permitted Commercial Services" and is limited to the residential trademarks. Engel & Volkers as the franchisor also reserves the right to operate or franchise a commercial real estate brokerage at any location inside the Protected Area, other than the limited Permitted Commercial Services that a franchisee may offer.