What is the Engel & Volkers franchisee's responsibility regarding income taxes and social security contributions for their staff?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
r 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.).
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the franchisee is solely responsible for fulfilling all employment contracts with their staff and sales advisors. This responsibility includes the deduction and remittance of income taxes and social security contributions. Engel & Volkers explicitly states that they are not a party to the franchisee's employment contracts and will not be held liable as a joint employer.
Engel & Volkers emphasizes that franchisees have exclusive control over their employees, including hiring, scheduling, compensation, and termination. Franchisees are obligated to pay all salaries, benefits, and employment-related liabilities, such as workers' compensation insurance premiums, payroll taxes, Social Security contributions, Affordable Care Act contributions, and unemployment insurance premiums. The franchisor's role is limited to setting minimum staffing requirements to ensure the franchised business operates in accordance with the Engel & Volkers system standards.
Engel & Volkers may provide recommendations regarding salaries or hourly wages, but the franchisee is not obligated to follow these suggestions. The franchisee has the autonomy to determine employee compensation. This arrangement ensures that Engel & Volkers franchisees are fully responsible for managing their staff and complying with all relevant employment laws and tax obligations.