Will Engel & Volkers franchisees have to pay extra for services from third parties?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
The ongoing Royalty payment stipulated in Section 14.2 will cover the services provided by Franchisor, except Franchisee will have to pay for services of third parties subject to such third parties' or Franchisor's then current price lists (for example, additional training and GG Magazine advertising, and for the cost of marketing materials).
Failure on Franchisee's part to avail itself of any services shall not affect the amount of the Royalty payments.
Each of these price lists (hereinafter called the "Price Lists") are subject to revision at any time by the third party or by Franchisor.
Franchisee will pay the prices set forth in the respective Price List then current at the time the services are ordered.
Franchisor will periodically provide Franchisee with a separate price list for training, the GG Magazine advertising, and marketing articles.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees will likely incur additional costs for services provided by third parties. While the ongoing royalty payments cover the services Engel & Volkers provides, franchisees are responsible for paying for third-party services based on the third party's or Engel & Volkers' current price lists.
Examples of services that may require additional payments include extra training, advertising in GG Magazine, and the cost of marketing materials. Engel & Volkers will provide franchisees with separate price lists for training, GG Magazine advertising, and marketing articles. These price lists are subject to change by the third party or by Engel & Volkers at any time.
This arrangement is fairly typical in franchising, where franchisors often outsource certain services or require franchisees to use specific vendors. It's important for prospective Engel & Volkers franchisees to factor in these potential additional costs when evaluating the overall investment and operating expenses of the franchise. Franchisees should regularly review the price lists provided by Engel & Volkers to stay informed about the costs of these third-party services.