What is the Engel & Volkers franchisee's relationship to the franchisor regarding employment?

upply contract.

Franchisor makes no representation that Franchisor will enter into any Systemwide Supply Contracts or other exclusive supply arrangements or, if Franchisor does so, that Franchisee would not otherwise be able to purchase the same programs, products and/or services at a lower price from another supplier. Franchisee agrees that, as between the parties hereto, Franchisor may add to, modify, substitute or discontinue Systemwide Supply Contracts or exclusive supply arrangements in the exercise of Franchisor's business judgment.

6. General Obligations of Franchisee

• 6.1 Independent Contractor: Franchisee is and shall be an independent contractor and nothing contained in this Agreement shall be construed to create a partnership, joint venture, agency, fiduciary, or employment relationship of any kind between the parties. Franchisee does not have the authority to bind or obligate Franchisor in any way by any promise or representation, except as specifically and expressly authorized by Franchisor in writing. Franchisee will exercise full and complete control over and have full responsibility for its franchised Business. Any education, support, advice or resources Franchisor provides to Franchisee in connection with the franchised Business is solely for the purpose of protecting the ENGEL & VÖLKERS System, including the Trademarks, and goodwill associated with the ENGEL & VÖLKERS System and assisting Franchisee in the operation of the franchised Business, and not for the purpose of controlling or in any way exercising or exerting control over Franchisee's decisions or the day-to-day operation of the franchised Business, including Franchisee's personnel-related decisions.
• 6.2 Personnel: Franchisee hereby agrees to employ only qualified personnel with background, experience and credentials customary under best practices and standards in the real estate brokerage industry. Franchisee and, if an entity, at least one of its officers, partners and/or managers, must be licensed as a real estate broker, and every employee, contractor, or Sales Advisor who is involved in real estate activities for Franchisee shall have a real estate broker, salesperson or other appropriate license, if and as required by applicable law, rules or regulations. These employees, contractors, and Sales Advisors must have attended an appropriate training course conducted by Franchisor and have passed related tests. Franchisee is responsible for ensuring that its real estate brokerage is open during local normal business hours for residential real estate brokerages. Franchisee shall be responsible for ensuring that its obligations under this Agreement are observed by its employees,

contractors, and Sales Advisors. Franchisee understands and agrees that Franchisor is not a party to Franchisee's employment contracts (neither as sole, nor as a joint employer) with its own staff and Sales Advisors, and Franchisee shall be solely liable for fulfillment of these contracts in every respect (e.g., deduction and remittance of income taxes, social security contributions, etc.). None of Franchisee's employees, contractors or Sales Advisors will be considered to be Franchisor's employees and Franchisee acknowledges that Franchisor is not in a position to exercise control over Franchisee's employees, contractors or Sales Advisors. Neither Franchisee nor any of its employees, contractors or Sales Advisors whose compensation it pays may in any way, directly or indirectly, expressly or by implication, be construed to be Franchisor's employee for any purpose, including with respect to any mandated or other insurance coverage, tax or contributions, or requirements pertaining to withholdings, levied or fixed by any city, state or federal governmental agency. Franchisee expressly agrees, and will never contend otherwise, that Franchisor's authority under this Agreement to certify certain of Franchisee's employees, contractors or Sales Advisors for qualification to perform certain functions for Franchisee's franchised Business does not directly or indirectly vest in Franchisor the power to hire, fire or control any such employee, contractor or Sales Advisor.

• 6.3 Franchisee acknowledges and agrees, and will never contend otherwise, that Franchisee alone will exercise day-to-day control over all operations, activities and elements of its franchised Business hereunder and that under no circumstance shall Franchisor do so or be deemed to do so. Franchisee further acknowledges and agrees, and will never contend otherwise, that the various requirements, restrictions, prohibitions, specifications and procedures of the ENGEL & VÖLKERS System which Franchisee is required to comply with under this Agreement, whether set forth in the System Documentation or otherwise, do not directly or indirectly constitute, suggest, infer or imply that Franchisor controls any aspect or element of the day-to-day operations of Franchisee's franchised Business, which Franchisee alone controls, but only constitute standards Franchisee must adhere to when exercising Franchisee's control of the day-to-day operations of its franchised Business.
• 6.4 Franchisee may not, without Franchisor's prior, express, written approval, obligate Franchisor for any expenses, liabilities or other obligations, other than as specifically provided in this Agreement. Except as expressly provided in this Agreement, Franchisor may not control or have access to Franchisee's funds or the expenditure of Franchisee's funds or in any other way exercise dominion or control over Franchisee's business. Except as otherwise expressly authorized by this Agreement, neither party will make any express or implied agreements, warranties, guarantees or representations or incur any debt in the name of or on behalf of the other party, or represent that the relationship between Franchisor and Franchisee is other than that of franchisor and franchisee. Franchisor does not assume any liability, and each will not be considered liable, for any agreements, representations, or warranties made by Franchisee which are not expressly authorized under this Agreement. Franchisor will not be obligated for any damages to any person or property which directly or indirectly arise from or relate to Franchisee's operation of the franchised Business hereunder.
• 6.5 Franchisee covenants and promises that it will not avail itself of any rights or remedies at law or in equity that may arise from an assertion that: (i) Franchisee is Franchisor's agent, legal representative, subsidiary, joint venturer, partner, employee, or servant; or (ii) Franchisor is an employer or joint employer for Franchisee's employees. If such a claim is brought against Franchisor, Franchisor may use Franchisee's covenant in this Section as an absolute defense against such claim. Further, if any such claim is brought

against Franchisor or its affiliates or subsidiaries, or its current and former officers, directors, shareholders, partners, employees, predecessors, successors, attorneys, agents, representatives, and assigns, Franchisee will indemnify, defend, reimburse and hold harmless any such party from and against any such claim.

Franchisee hereby irrevocably affirms, attests and covenants its understanding that in no fashion is Franchisee, or may Franchisee be deemed to be, Franchisor's employee (under any theory or definition of "employee" or "employment") and that Franchisee's employees and contractors are employed or engaged exclusively by Franchisee and in no fashion is Franchisee or any such employee or contractor either employed, jointly employed or coemployed by Franchisor. Franchisee further affirms and attests that each of its employees is under the exclusive dominion and control of Franchisee and never under the direct or indirect control of Franchisor in any fashion whatsoever. Franchisee alone hires each of its employees; sets their schedules; establishes their compensation rates; and, pays all salaries, benefits and employment-related liabilities (workers' compensation insurance premiums/payroll taxes/Social Security contributions/Affordable Care Act contributions/unemployment insurance premiums). Franchisee alone has the ability to discipline or terminate its employees to the exclusion of Franchisor, which has no such authority or ability. Franchisee further attests and affirms that minimum staffing requirements established by Franchisor, if any, are solely for the purpose of ensuring that Franchisee's franchised Business is at all times staffed at those levels necessary to operate Franchisee's business in conformity with the ENGEL & VÖLKERS System and the services, standards of quality and efficiency, and other ENGEL & VÖLKERS brand attributes known to and desired by the consuming public and associated with the Trademarks. Franchisee affirms, warrants and understands that it may staff its franchised business with as many employees and contractors as it desires at any time so long as Franchisor's minimal staffing levels are achieved. Franchisee also affirms and attests that any recommendations it may receive from Franchisor regarding salaries, hourly wages or other compensation for employees are recommendations only, designed to assist it to efficiently operate its franchised Business, and that Franchisee is entirely free to disregard Franchisor's recommendations regarding such employee compensation. Moreover, Franchisee affirms and attests that any training provided by Franchisor for Franchisee's employees and contractors is geared to impart to those employees and contractors, with ultimate authority, the various procedures, protocols, systems and operations of a franchised business and in no fashion reflects any employment relationship between Franchisor and such employees and contractors. Finally, should it ever be asserted that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors in any private or government investigation, action, proceeding, arbitration or other setting, Franchisee irrevocably agrees to assist Franchisor in defending said allegation, including (if necessary) appearing at any venue requested by Franchisor to testify on Franchisor's behalf (and, as may be necessary, submitting itself to depositions, other appearances and/or preparing affidavits dismissive of any allegation that Franchisor is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors).

Source: Item 22 — CONTRACTS (FDD page 88)