What is the Engel & Volkers franchisee's obligation regarding the proposed assignee's attendance and successful completion of training?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor does not elect to exercise its right of first refusal (as provided in Section 22.5 below), then Franchisor will not unreasonably withhold consent to Franchisee's sale, transfer or assignment of any interest in Franchisee (if Franchisee is a business entity), the
franchise conveyed by this Agreement and Franchisee's right to use the ENGEL & VÖLKERS System, or any interest in any of these, to a third party. Franchisee agrees that it will not be unreasonable for Franchisor to impose, among other requirements, the following conditions to granting consent to Franchisee's proposed sale, assignment or transfer of any of the foregoing:
- 22.3.1 That the proposed assignee (meaning individual or business entity which, after the proposed assignment, will be the franchisee under this Agreement or under any successor/renewal agreement) applies to Franchisor for acceptance as a franchisee and demonstrates to Franchisor's satisfaction that the proposed assignee (and, if it is a business entity, each and every Principal owner and guarantor of the proposed assignee) possesses the skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume the duties and obligations under this Agreement or any successor agreement.
Franchisee must pay the costs of any investigation required to be conducted by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if a franchisee wishes to sell or transfer their franchise to a third party, the proposed assignee must apply to Engel & Volkers for acceptance as a franchisee. The proposed assignee must demonstrate to Engel & Volkers' satisfaction that they possess the skills, qualifications, financial condition, background, history, reputation, economic resources, education, managerial and business experience, moral character, credit rating, and ability to assume the duties and obligations under the Franchise Agreement.
This means that the prospective buyer needs to meet Engel & Volkers' standards, similar to a new franchisee. Engel & Volkers assesses the proposed assignee's capabilities and background to ensure they can successfully operate the franchise. The franchisee is responsible for ensuring the proposed buyer completes an application and provides all necessary information for Engel & Volkers to make an informed decision.
The franchisee must pay the costs of any investigation required to be conducted by Engel & Volkers. This implies that the franchisee will bear the financial burden of the background checks and assessments Engel & Volkers deems necessary to evaluate the proposed assignee. This is a standard practice in franchising to ensure brand consistency and protect the franchise system.
In summary, an Engel & Volkers franchisee looking to sell their franchise must ensure the potential buyer applies for acceptance, meets Engel & Volkers' standards, and covers the costs of any required investigations. While the FDD excerpt specifies the requirements for the assignee, it does not explicitly state that attendance and successful completion of training is a condition of approval. A prospective franchisee should clarify with Engel & Volkers whether the proposed assignee is required to attend and successfully complete training.