factual

Is an Engel & Volkers franchisee required to defend the Franchisor against claims?

Engel_Volkers Franchise · 2025 FDD

Answer from 2025 FDD Document

Finally, should it ever be asserted that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors in any private or government investigation, action, proceeding, arbitration or other setting, Franchisee irrevocably agrees to assist Franchisor in defending said allegation, including (if necessary) appearing at any venue requested by Franchisor to testify on Franchisor's behalf (and, as may be necessary, submitting itself to depositions, other appearances and/or preparing affidavits dismissive of any allegation that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors).

To the extent Franchisor is the only named party in any such investigation, action, proceeding, arbitration or other setting to the exclusion of Franchisee, then should any such appearance by Franchisee be required or requested by Franchisor, Franchisor will recompense Franchisee the reasonable costs associated with Franchisee appearing at any such venue (including travel, lodging, meals and per diem salary or other compensation, if applicable).

17.1 Indemnity:

Franchisee will, at its sole cost, at all times defend, reimburse and hold harmless Franchisor and its affiliates, subsidiaries, successors, assigns and designees; and, the officers, directors, managers, employees, contractors, agents, attorneys, shareholders, owners, members, designees and representatives of all of the foregoing (Franchisor and all others referenced above being the "Indemnified Parties"), and indemnify and hold harmless Franchisor and the other Indemnified Parties to the fullest extent permitted by law, against all claims, losses, liabilities and costs (as denominated in the following paragraph) incurred in connection with any judicial, administrative or arbitration action or proceeding (including bankruptcy, insolvency, debtor/creditor or similar proceedings), suit, claim, demand, investigation, or formal or informal inquiry (regardless of whether any of the foregoing is reduced to judgment) or any settlement of the foregoing, which actually or allegedly, directly or indirectly, arises out of, is based upon, is a result of or is related in any way to any element of Franchisee's entry into this Agreement; actions or omissions committed by Franchisee or its affiliates, employees, contractors, or Sales Advisors in connection with the operation of the ENGEL & VÖLKERS Residential Real Estate Brokerage hereunder; the establishment, construction, ownership, opening and operation of the office of Franchisee's franchised Business hereunder, including any other business operating within or in relation to the office (which other business, if any, shall be subsumed within this paragraph's references to the office) and further including (without limitation) any personal, bodily or mental injury, death, property damage or loss, suffered by any customer, visitor, manager, operator, supplier, employee, contractor, or guest of the franchised ENGEL & VÖLKERS office; crimes committed on or near any of the premises or facilities of Franchisee's franchised Business or vehicles used by Franchisee's franchised Business; all acts, errors, neglects or omissions engaged in by Franchisee, its contractors or subcontractors, as well as any third party, arising out of or related to the design, construction, conversion, build-out, outfitting, remodeling, renovation or upgrading of its franchised ENGEL & VÖLKERS office, whether or not any of the foregoing was approved by Franchisor; defects in any ENGEL & VÖLKERS franchised office that Franchisee constructs and/or operates, whether or not discoverable by Franchisee or by Franchisor; all acts, errors, neglects or omissions of Franchisee or the franchised ENGEL & VÖLKERS Residential Real Estate Brokerage and/or the owners, officers, directors, management, employees, agents, servants, contractors, partners, proprietors, affiliates or representatives of Franchisee and/or the franchised Business and/or the location thereof (or any third party acting on Franchisee's behalf or at Franchisee's direction), whether in connection with the franchised business, the office or otherwise, including (without limitation) any property damage, injury or death suffered or caused by any vehicle serving the franchised Business; any claim, however and wherever asserted, that Franchisor or its respective affiliates are the employer, joint employer or coemployer of Franchisee and/or Franchisee's employees or contractors; claims that Franchisee, its owners, employees, contractors, brokers or Franchisee's Sales Advisors are Franchisor's employees, agents or part of a common enterprise with Franchisor, including claims regarding violation or labor or employment law regulations; third party claims against Franchisor arising from or related to Franchisee's breach of the terms, restrictions and requirements of this Agreement (including, without limitation, Franchisee's unauthorized use of the Trademarks, violation of any applicable laws, codes, rules or regulations or failure to comply with Information Privacy Laws); Franchisee's violation of Information Privacy Laws; all liabilities arising from Franchisee's offer, sale and/or delivery of programs, services and/or products as contemplated by this Agreement; Franchisee's offer, sale and/or delivery of securities, equity interests or other ownership interests in Franchisee or the franchised ENGEL & VÖLKERS office or business of Franchisee; all activities, conduct and representations which Franchisee may engage in

Source: Item 22 — CONTRACTS (FDD page 88)

What This Means (2025 FDD)

According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees have specific obligations to defend and indemnify the franchisor under certain circumstances.

Specifically, if it is asserted that Engel & Volkers is the employer, joint employer, or co-employer of the franchisee or any of the franchisee's employees or contractors, the franchisee must assist Engel & Volkers in defending against this allegation. This assistance includes appearing at any venue requested by Engel & Volkers to testify on their behalf and submitting to depositions or preparing affidavits to deny any such employment relationship. If the franchisee's appearance is required in an investigation where Engel & Volkers is the only named party, Engel & Volkers will cover the franchisee's reasonable costs for appearing, including travel, lodging, meals, and per diem salary or other compensation, if applicable.

Furthermore, the franchisee is obligated to defend, reimburse, and hold harmless Engel & Volkers against all claims, losses, liabilities, and costs arising from various situations. These situations include any actions or omissions by the franchisee or their affiliates, employees, contractors, or sales advisors in connection with the operation of the Engel & Volkers Residential Real Estate Brokerage; the establishment, construction, ownership, and operation of the franchisee's office; and any claims related to personal injury, death, property damage, or crimes occurring at the franchised business. This also extends to claims that the franchisee, its owners, employees, or contractors are Engel & Volkers' employees or agents, and third-party claims arising from the franchisee's breach of the franchise agreement, unauthorized use of trademarks, violation of laws, or failure to comply with Information Privacy Laws.

This indemnification requirement means that franchisees could face significant financial exposure if claims arise from their business operations or actions. Franchisees should ensure they have adequate insurance coverage and legal counsel to address these potential liabilities. The obligations outlined in this section survive the expiration or termination of the franchise agreement, meaning that franchisees could still be responsible for claims even after the agreement ends.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.