What is the Engel & Volkers franchisee's obligation regarding the confidentiality of the Limited Purpose Sales Location Addendum?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7. Confidentiality**.** Franchisee covenants and agrees to keep the existence of this Limited Purpose Sales Location Addendum and its provisions secret and confidential and not to disclose same to anyone else, except to Franchisee's advisers, and only if necessary for the efficient and proper operation of the franchised business, or except as part of an assignment that is approved by Franchisor.
In the event Franchisee breaches this provision, this Limited Purpose Sales Location Addendum, or any part thereof, shall be at the election of the Franchisor, be null and void and such benefits accruing to Franchisee shall thereupon terminate.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees must maintain the confidentiality of the Limited Purpose Sales Location Addendum. Specifically, the franchisee is obligated to keep the existence and provisions of this addendum secret and confidential. This means they cannot disclose it to anyone, except their advisors, and even then, only if it's necessary for the efficient operation of the franchised business. Disclosure is also permitted as part of an assignment that has Engel & Volkers's approval.
This confidentiality requirement is a significant obligation for Engel & Volkers franchisees. Breaching this provision can have serious consequences. If a franchisee violates the confidentiality clause, Engel & Volkers has the right to nullify the Limited Purpose Sales Location Addendum. This would mean the franchisee would lose any benefits associated with the addendum.
Confidentiality clauses are common in franchise agreements to protect sensitive business information and maintain a competitive advantage. The Engel & Volkers requirement ensures that the terms related to specific sales locations are not disclosed to competitors or other parties who could use the information to the detriment of the franchise system. Franchisees should carefully consider this obligation and ensure they have appropriate safeguards in place to prevent unauthorized disclosure.