What is the Engel & Volkers franchisee solely liable for regarding their staff and Sales Advisors?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee understands and agrees that Franchisor is not a party to Franchisee's employment contracts (neither as sole, nor as a joint employer) with its own staff and Sales Advisors, and Franchisee shall be solely liable for fulfillment of these contracts in every respect (e.g., deduction and remittance of income taxes, social security contributions, etc.). None of Franchisee's employees, contractors or Sales Advisors will be considered to be Franchisor's employees and Franchisee acknowledges that Franchisor is not in a position to exercise control over Franchisee's employees, contractors or Sales Advisors. Neither Franchisee nor any of its employees, contractors or Sales Advisors whose compensation it pays may in any way, directly or indirectly, expressly or by implication, be construed to be Franchisor's employee for any purpose, including with respect to any mandated or other insurance coverage, tax or contributions, or requirements pertaining to withholdings, levied or fixed by any city, state or federal governmental agency. Franchisee expressly agrees, and will never contend otherwise, that Franchisor's authority under this Agreement to certify certain of Franchisee's employees, contractors or Sales Advisors for qualification to perform certain functions for Franchisee's franchised Business does not directly or indirectly vest in Franchisor the power to hire, fire or control any such employee, contractor or Sales Advisor.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchisee is solely responsible for fulfilling employment contracts with their staff and Sales Advisors. This responsibility includes deducting and remitting income taxes and social security contributions. Engel & Volkers is not a party to these employment contracts, nor are the franchisee's personnel considered employees of Engel & Volkers. Engel & Volkers maintains no control over the franchisee's employees, contractors, or Sales Advisors.
This arrangement means that the Engel & Volkers franchisee operates as an independent contractor, managing their own personnel and business operations. The franchisee is responsible for all personnel-related decisions, including hiring, firing, and controlling their staff. Engel & Volkers' authority to certify certain personnel for specific functions does not give it the power to control those individuals.
This independent contractor relationship is typical in franchising, where franchisees are granted significant autonomy in managing their businesses. However, it also places the onus on the franchisee to ensure compliance with all applicable labor laws and regulations. The franchisee must handle all disputes or complaints involving their staff, Sales Advisors, or clients professionally and fairly, without involving Engel & Volkers in day-to-day management issues.
Prospective Engel & Volkers franchisees should carefully consider the implications of this independent contractor relationship. They should be prepared to manage all aspects of personnel management, including payroll, taxes, and compliance with labor laws. Understanding these responsibilities is crucial for the successful operation of an Engel & Volkers franchise.