What must an Engel & Volkers franchisee do regarding applicable laws and regulations for the franchised business?

You must comply with all applicable laws and regulations and obtain all appropriate governmental approvals for the franchised business. You must operate in conformity with the methods, standards and specifications required by us to maintain uniformity within our system and to provide the highest degree of quality and service. You must not deviate from our standards and specifications without our prior written consent.

Franchisee hereby agrees to observe and obey all federal, state and local laws, official regulations and decrees applicable in the state where its Approved Location is located, as well as anywhere else where Franchisee conducts business pursuant to this Agreement.

This obligation includes licensing as a real estate broker, and any licenses and permits which it may require for the performance of its business.

During the Term, Franchisee must provide Franchisor annually (no later than January 31 of each year) with a current copy of its real estate broker license.

In particular, Franchisee agrees to abstain from any actions which Franchisor has expressly agreed not to perform in agreements with third parties or from which it is obliged to abstain under law.

• 26.11.3 Franchisee undertakes to operate its franchised Business in strict compliance with all applicable laws, rules and regulations of all governmental authorities; comply with all applicable wage, hour and other laws and regulations; prepare and file all necessary tax returns; pay all taxes imposed on Franchisee related to the Residential Real Estate Brokerage; obtain and keep in good standing all necessary licenses, permits and other required forms of governmental approval required for Franchisee to offer and sell the services and products which now or in the future are part of the ENGEL & VÖLKERS System; pay or cause to be paid prior to delinquency all taxes, fines, fees and/or assessments arising out of or in connection with the operation of its franchised Business; and, otherwise be responsible for compliance, at Franchisee's sole expense, with all governmental or quasigovernmental requirements, restrictions, duties and responsibilities.

• 26.11.4 Franchisee shall notify Franchisor in writing within five (5) days of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, which may adversely affect the operation or financial condition of Franchisee.

• 26.11.5 Franchisee and its Principals understand the requirements of, and will abide by, all United States government economic sanctions requirements throughout the Term.

• 26.11.6 Franchisee must, if required by law to do so, comply with all federal and state information data privacy and data security laws and regulations that may be applicable to the franchised Business and the information that the franchised Business collects from its customers and prospective customers, Sales Advisors, staff members and other third parties, including data protection laws, laws regulating marketing communications, and information security regulations (all such laws and regulations, hereinafter called "Information Privacy Laws"). Without limiting the generality of the foregoing, this may include:

  • i. adopting and implementing adequate measures (hereinafter called "Security Measures") to secure the confidentiality of all financial, personal and other sensitive information Franchisee collects from its customers and prospective customers, Sales Advisors, staff members and other third parties (hereinafter called "Financial Information");
  • ii. providing customers and prospective customers, Sales Advisors, staff members and other third parties with written notice of the ENGEL & VÖLKERS System's privacy policies and the uses to be made of Financial Information by Franchisee, and by Franchisor and its affiliates and the other businesses and companies to whom they respectively may disclose Financial Information (hereinafter called the "Privacy Policy Notice");
  • iii. providing customers and prospective customers, Sales Advisors, staff members and other third parties with prior written notice of disclosure of any Financial Information collected from them (hereinafter called "Disclosure Notice"); and
  • iv. providing customers and prospective customers, Sales Advisors, staff members and other third parties with notice of any "opt-out" rights regarding such disclosures and uses of their Financial Information and an adequate opportunity to exercise such rights (hereinafter called "Opt-Out Notice").

From time to time, Franchisor may formulate policies and practices concerning Security Measures, the form, content, and manner of delivering

Privacy Policy Notices, Disclosure Notices, and Opt-Out notices, as well as matters relating or incidental thereto. Franchisee must adopt and implement all such policies and practices in accordance with written instructions in a timely manner.

Source: Item 16 — RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL (FDD pages 62–63)