When a franchisee proposes an assignment, what must they deliver to Engel & Volkers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.3.13 That Franchisee and, if Franchisee is a business entity, each of its owners and guarantors, and the assignee (and if the assignee is a business entity, each of its owners and guarantors) execute Franchisor's then-standard form of General Release.
- 22.3.15 That Franchisee furnish Franchisor with a copy of any proposed contract of assignment (and any related agreements) and, promptly following execution, furnish to Franchisor a copy of the executed contract of assignment (and any related agreements).
- 22.3.16 That Franchisee pay Franchisor a transfer fee of $2,500 to compensate Franchisor for its legal, accounting and other expenses incurred in connection with Franchisee's assignment; provided, however, that a transfer fee will not be charged for mortgages or other usual encumbrances associated with financing.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, a franchisee looking to assign their franchise to a third party must fulfill several requirements. First, the franchisee must furnish Engel & Volkers with a copy of any proposed contract of assignment and any related agreements. Following the execution of the contract, the franchisee must promptly provide Engel & Volkers with a copy of the executed contract of assignment and all related agreements.
Additionally, the franchisee is responsible for paying Engel & Volkers a transfer fee of $2,500. This fee is intended to compensate Engel & Volkers for the legal, accounting, and other expenses they incur while processing the assignment. However, this transfer fee is not applicable to mortgages or other standard encumbrances associated with financing.
Furthermore, both the franchisee (and its owners and guarantors, if the franchisee is a business entity) and the assignee (and its owners and guarantors, if the assignee is a business entity) must execute Engel & Volkers' then-standard form of General Release. These conditions ensure that Engel & Volkers maintains control over who joins their franchise system and that they are compensated for the administrative costs associated with the transfer.