Is an Engel & Volkers franchisee required to purchase or lease goods from Engel & Volkers, its designees, or approved suppliers?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
us or our affiliates are refundable. We do not offer financing.
Item 8 RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
You must comply with all of our mandatory standards, methods, policies, products, procedures, techniques, standards and specifications that we prescribe in the Systems Documentation or other written or electronic communications, including any requirement to purchase or lease goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate or comparable items related to establishing or operating the franchised business from us, our designees, or suppliers approved by us or under our specifications.
We currently require that you purchase from us, one of our affiliates, or suppliers approved by us, certain marketing materials, including pens, printed materials and brochures that feature the Trademarks. As discussed below, you will have to place advertisements within the GG Magazines from Grund Genug Verlag. However, if we grant you a franchise to operate multiple Approved Locations, you must place at least 1 full page advertisement per year for the first and second Approved Location, at least 1 additional full page advertisement per year for the third and fourth Approved Location and at least 1 additional advertisement per year for five or subsequent Approved Location, for a maximum of 3 required ads per year total. This number may vary in future. See Item 11. We reserve the right to designate one or more third parties, ourselves or an affiliate to supply you with certain categories of other goods or services. Currently, Grund Genug Verlag is an approved supplier. At this time, there are no other approved suppliers.
You must purchase or lease a phone and copy machine from independent vendors for the operation of your Residential Real Estate Brokerage. We may require you to purchase or acquire certain computer hardware and/or software as deemed necessary for the operation of your franchised business within our system. We may set standards in the System Documentation for computer hardware and software. You may purchase the appropriate computer hardware from many different suppliers (for minimum
requirements see the System Documentation). You and your staff will have to use the standard Engel & Völkers e-mail addresses and signatures which are used for communication purposes. See Item 11.
For the operation of your Engel & Völkers Real Estate Brokerage, you must purchase furniture, office equipment, signage, supplies and other products and services, etc. used in your real estate business that meet the specifications described in the System Documentation. We have the right to change the list of items periodically. We have specific corporate identity standards for the furniture, fixtures and equipment that you have to use in your Residential Real Estate Brokerage described in our System Documentation.
One or more of our officers may own nominal interests in certain of our suppliers that are public companies.
You will need to maintain in effect at all times during the term of the Franchise Agreement a policy or policies of insurance, naming us as an additional insured, with public liability limits of no less than the following amounts: professional liability (real estate errors and omissions) – $2,000,000 each occurrence, bodily injury - $2,000,000 each person; $2,000,000 each accident, and property damage - $2,000,000 each accident. We also recommend a cyber risk /data breach insurance. You must also maintain workers' compensation and other liability insurance as required by state law. We may periodically add to, modify, or delete the types and amounts of insurance coverage that you must maintain. Upon delivery of written notice you must immediately purchase insurance that conforms with the new standards.
We will issue and modify standards and specifications through the System Documentation as it deems necessary or appropriate for management, marketing, operations and management efficiency.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 38–40)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees are generally required to purchase or lease goods, services, and supplies from Engel & Volkers, its designees, or approved suppliers. This includes items related to establishing and operating the franchised business. Engel & Volkers mandates compliance with their standards, methods, policies, and procedures as outlined in the System Documentation. Currently, franchisees must purchase certain marketing materials, such as pens, printed materials, and brochures featuring the Engel & Volkers trademarks, from Engel & Volkers, its affiliates, or approved suppliers. Additionally, franchisees are required to place advertisements within the GG Magazines from Grund Genug Verlag.
Engel & Volkers reserves the right to designate or approve suppliers for products and services using their trademarks. While franchisees can purchase certain trademarked products and services from other suppliers, these sources must be approved by Engel & Volkers. Grund Genug Verlag is currently the only approved supplier for GG Magazine. For operating the real estate brokerage, franchisees must acquire furniture, office equipment, signage, and other products and services that meet the specifications detailed in the System Documentation. Engel & Volkers also has specific corporate identity standards for furniture, fixtures, and equipment.
For the fiscal year ending December 31, 2024, Engel & Volkers's total revenue was $27,864,688, with revenues from required purchases and leases amounting to $1,325,068, or 4.8% of total revenues. The percentage of required purchases relative to all purchases needed to establish and operate the business is estimated to be approximately 20% to 25%. Engel & Volkers may also negotiate purchase arrangements with suppliers for the benefit of franchisees.
Prospective franchisees should be aware that Engel & Volkers or its affiliates may profit from franchisee purchases from approved suppliers. However, Engel & Volkers states that franchisees will not receive any material benefits from using designated or approved sources. Engel & Volkers retains the right to re-inspect the products and services of any approved supplier and revoke approval if the supplier fails to meet current criteria. Franchisees must also maintain specific insurance policies, naming Engel & Volkers as an additional insured, with liability limits of $2,000,000 for professional liability, bodily injury, and property damage.