When is the Engel & Volkers franchisee required to pay the Administrative Location fee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS | LIMITED PURPOSE ADMINSTRATIVE LOCATION ADDENDUM ("Administrative Location Addendum") is made and entered into this (the "Effective Date") by and between ENGEL & VÖLKERS AMERICAS, INC., a Delaware corporation ("Franchisor"), and, a ("Franchisee"). |
|---|---|
| as set forth in the FA. | WHEREAS, Franchisor and Franchisee entered into a Franchise Agreement, dated (the |
| "FA") providing Franchisee with the right to use the ENGEL & VÖLKERS System to operate an Engel & | |
| Völkers Residential Real Estate Brokerage and conduct the franchised Business at an Approved Location | |
| WHEREAS, Franchisee has requested to operate an additional location within Franchisee's | |
| Protected Area for the limited purpose of housing Franchisee's administrative and support personnel and | |
| related administrative tasks for Franchisee's franchised Business. | |
| FA. | NOW THEREFORE, in consideration of the provisions in the FA, the promises in this |
| Administrative Location Addendum, and other good and valuable consideration, the delivery, receipt, and | |
| sufficiency of which are acknowledged, the parties mutually agree as set forth below. All capitalized terms | |
| not defined in this Administrative Location Addendum shall have the respective meanings set forth in the | |
| 1. | Grant of Limited Purpose Administrative Location: |
| 1.1 | Franchisor hereby grants Franchisee the non-exclusive, non-transferrable right to |
| establish and operate a Limited Purpose Administrative Location at, and only at the | |
| following | |
| location: | |
| (the | |
| "Administrative | |
| Location") within Franchisee's Protected Area subject to the terms of this Administrative | |
| Location Addendum and the FA. | |
| 1.2 | Franchisee acknowledges and agrees that the Administrative Location is not deemed to |
| be nor does it constitute, replace or otherwise amend Franchisee's obligation to establish | |
| and operate an Approved Location as set forth in the FA. | |
| 1.3 | Franchisee may not relocate the Administrative Location without Franchisors prior |
| written consent. Operating this Administrative Loc |
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, a franchisee must pay a one-time, non-refundable fee of $2,500 for their Administrative Location. This fee is due at the time of execution of the Administrative Location Addendum. The payment must be made via wire transfer or another method specified by Engel & Volkers.
This fee covers the administrative location only, which is used for housing administrative and support personnel and performing administrative tasks related to the franchised business. It's important to note that this location cannot be used for public traffic, on-site client interactions, or real estate transactions. The franchisee is also responsible for all costs associated with constructing, remodeling, and equipping the Administrative Location, ensuring it meets Engel & Volkers' standards for cleanliness and maintenance.
Prospective Engel & Volkers franchisees should factor this $2,500 fee into their initial investment costs when considering opening an administrative location. Understanding the timing of this payment, due upon signing the addendum, is crucial for managing cash flow during the initial stages of setting up the franchise. Additionally, franchisees should be aware of the restrictions on the use of the administrative location, as it is strictly for internal administrative purposes and not for direct client-facing activities.