Is the franchisee's inability to terminate the Engel & Volkers Franchise Agreement subject to state law?

According to the 2025 Engel & Volkers Franchise Disclosure Document, the franchisee's ability to terminate the Franchise Agreement is subject to state law. Specifically, the FDD indicates that while the standard agreement states a franchisee "may not terminate or cancel the Franchise Agreement," this provision is indeed subject to state law. This means that state laws may provide franchisees with certain termination rights that supersede the general prohibition in the franchise agreement.

For a prospective Engel & Volkers franchisee, this is an important consideration. The franchise agreement's restrictions on termination might not be absolute, and the franchisee's rights could vary depending on the state in which they operate their franchise. Some states have franchise laws that grant franchisees specific rights to terminate under certain conditions, such as a material breach by the franchisor or other circumstances.

Furthermore, the addendum to the FDD indicates that for franchises offered and sold in North Dakota, the laws of North Dakota supersede any conflicting provisions in the Franchise Agreement or New York law. This highlights the importance of understanding the specific state laws that govern the franchise agreement. Prospective franchisees should consult with a legal professional to understand their rights and obligations under both the franchise agreement and applicable state laws, particularly regarding termination rights.