What is the Engel & Volkers franchisee's obligation regarding System Documentation compliance for Limited Purpose Locations?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
We may grant you the right to open and operate one or more limited purpose locations ("Limited Purpose Location(s)"), which will generally be located in your Protected Area and which will be subject to your continued complaince with the terms of your franchise agrement and certain standards as set forth in the System Documentation, as amended from time to time. Limited Purpose Locations are typically either locations for overflow administrative staff, or for sales advisors to use in connection with specific development projects. You must request our approval to operate a Limited Purpose Loction in writing in advance and provide sufficient information, as specified by us from time to time in the System Documentation, to support your request. Within 30 days after receiving such a request, we will, at our discretion, approve or deny your request. You will not receive any additional territorial rights with our aproval of a Limited Purpose Location. You may not operate a Limited Purpose Location without our aproval and unless we sign an Limited Purpose Sales Location Addendum or Limited Purpose Administrative Location Addendum with you for each Limited Purpose Location. You should not sign a lease or incur any other expenses or liabilities before an Limited Purpose Location Addendum for the proposed location is executed. A Limited Purpose Location is not and does not replace an Approved Location (as defined in the Franchise Agreement) and you will have no right of first refusal, option or similar rights to acquire additional franchises or for additional Limited Purpose Locations.
Source: Item 12 — TERRITORY (FDD pages 54–56)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees who are granted the right to open and operate Limited Purpose Locations must comply with the terms of their franchise agreement and certain standards as set forth in the System Documentation, as amended from time to time. These Limited Purpose Locations are generally situated within the franchisee's Protected Area and can be used for overflow administrative staff or by sales advisors working on specific development projects.
To operate a Limited Purpose Location, an Engel & Volkers franchisee must first request written approval from the franchisor, providing sufficient information as specified in the System Documentation. Engel & Volkers will then approve or deny the request within 30 days. It is important to note that franchisees cannot operate a Limited Purpose Location without approval and the execution of a Limited Purpose Sales Location Addendum or Limited Purpose Administrative Location Addendum for each location. Franchisees are cautioned against signing a lease or incurring expenses before this addendum is in place.
It's crucial to understand that a Limited Purpose Location does not replace an Approved Location as defined in the Franchise Agreement, and franchisees do not have rights of first refusal or options to acquire additional franchises or Limited Purpose Locations. This distinction is important for franchisees planning their long-term growth strategy within their Protected Area. Engel & Volkers retains the right to reduce a franchisee's Protected Area if the franchisee is granted the right to open multiple locations but fails to operate those additional locations as agreed upon in the Franchise Agreement.