What is the Engel & Volkers franchisee required to do when discussing the assignment of any economic interest to a third party?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ies of related transactions, by operation of law or otherwise (each, an "assignment"), without first obtaining Franchisor's written consent and, where applicable, complying with Franchisor's right of first refusal, each as provided in this Section 22. Any assignment in violation of this Section 22 will be null, void and of no effect. In addition, Franchisee must not sub-franchise, sub-license, subcontract, share or divide or partition rights under this Agreement without Franchisor's prior written consent. Franchisor may in its absolute discretion withhold such consent.
22.3 Assignment By Franchisee – Sale To Third Party
If Franchisee or any of its owners wish to solicit, offer, or discuss the assignment of any equity or economic interest in Franchisee or assets of its business to a third party (whether by stock sale, asset sale, merger, operation of law or otherwise), Franchisee shall use its best efforts and shall employ reasonable security measures, includi
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if a franchisee or any of its owners intends to solicit, offer, or discuss the assignment of any equity or economic interest in the franchise or its assets to a third party, they must take specific actions to protect proprietary information and inform Engel & Volkers.
Specifically, the franchisee is obligated to use their best efforts and employ reasonable security measures to prevent unauthorized disclosure of or access to proprietary information. This includes ensuring that any third parties who are to be presented with confidential information sign appropriate nondisclosure agreements that are acceptable to Engel & Volkers. The franchisee must also immediately inform Engel & Volkers of any information they have or receive regarding any unauthorized disclosure or access. Upon request, the franchisee must provide copies of all such non-disclosure agreements to Engel & Volkers.
These requirements ensure that Engel & Volkers can protect its confidential business information and maintain control over who becomes a franchisee within its system. This is a common practice in franchising, as franchisors need to carefully vet potential new franchisees to ensure they meet the brand's standards and are a good fit for the system. The franchisee is also responsible for covering the costs of any investigation that Engel & Volkers deems necessary to conduct during the assignment process.