What is the Engel & Volkers franchisee required to do regarding non-disclosure agreements with third parties?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
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, including having any third parties who are to be presented with Confidential Information sign appropriate nondisclosure agreements which are acceptable to Franchisor, to prevent any unauthorized disclosure of or access to the Proprietary Information and shall immediately advise Franchisor of any information it has or receives of any unauthorized disclosure or access. Franchisee shall provide copies of all such non-disclosure agreements to Franchisor upon request.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, if a franchisee plans to sell their equity or business assets to a third party, they must take specific steps to protect confidential information. This includes making their best effort to ensure that any third parties who receive confidential information sign non-disclosure agreements that are acceptable to Engel & Volkers. The franchisee must also inform Engel & Volkers immediately if they become aware of any unauthorized access to or disclosure of proprietary information. Upon request, the franchisee must provide Engel & Volkers with copies of all non-disclosure agreements.
This requirement ensures that Engel & Volkers's proprietary information remains protected during potential ownership changes. By mandating non-disclosure agreements and immediate reporting of breaches, Engel & Volkers aims to minimize the risk of its confidential information being misused or falling into the hands of competitors. This is a fairly standard practice in franchising, as franchisors need to protect their trade secrets and operational methods.
The franchisee's responsibility to enforce these non-disclosure agreements and report any breaches highlights the importance Engel & Volkers places on maintaining the confidentiality of its business practices. This obligation extends to using reasonable security measures to prevent unauthorized disclosure or access to proprietary information. The franchisor's right to request copies of these agreements allows them to monitor compliance and ensure that adequate protections are in place.
In practical terms, this means that an Engel & Volkers franchisee needs to have a legally sound non-disclosure agreement ready to use when discussing a potential sale with any third party. They also need to establish internal procedures for promptly reporting any suspected breaches of confidentiality to Engel & Volkers. Failing to comply with these requirements could potentially lead to legal or financial repercussions for the franchisee.