Does an Engel & Volkers franchisee have a right of first refusal to acquire additional franchises by operating an administrative location?
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 Location does not guarantee Franchisor's | |
| consent to grant another limited purpose location or extend the Term of this | |
| Administrative Location (as set forth hereinafter), which remains at Franchisor's sole | |
| discretion. | |
| 1.4 | Franchisee further acknowledges and agrees that it has no right of first refusal, option or |
| similar rights to acquire additional franchises, or a right to operate any additional | |
| administrative location, which Franchisor grants in its sole discretion. |
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, a franchisee does not have a right of first refusal or any similar rights to acquire additional franchises or to operate additional administrative locations. The granting of additional franchises or administrative locations is at Engel & Volkers' sole discretion. This is explicitly stated within the context of an Administrative Location Addendum to the standard Franchise Agreement.
This means that even if a franchisee successfully operates an administrative location, Engel & Volkers is not obligated to grant them additional franchise opportunities or allow them to open more administrative locations. The franchisee's performance and investment in the initial administrative location do not guarantee future expansion rights. Engel & Volkers retains full control over the growth and distribution of its franchise network.
For a prospective Engel & Volkers franchisee, this underscores the importance of understanding that expansion is not an automatic right. Franchisees should not assume that operating an administrative location will give them an advantage in securing additional territories or franchise units. Building a strong relationship with the franchisor and demonstrating exceptional performance may improve the chances of future expansion, but the ultimate decision rests with Engel & Volkers.