What is the Engel & Volkers Franchisor's obligation to the franchisee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
- 6.10 Professional Standards and Code of Ethics: When providing real estate brokerage services for the types of property covered by this Agreement and otherwise in the operation of the Residential Real Estate Brokerage, Franchisee and its staff members and Sales Advisors will protect the reputation and value of the ENGEL & VÖLKERS System and Trademarks. Where Franchisor determines in its sole discretion that Franchisee's action and/or inaction has put the ENGEL & VÖLKERS brand reputation at risk, Franchisee will provide all information requested by Franchisor regarding that risk and take all actions directed by Franchisor to mitigate that risk.
- 6.11 Information: To assist Franchisor to prepare its Franchise Disclosure Document, Franchisee agrees to promptly provide to Franchisor such information on the operation of its Residential Real Estate Broker as Franchisor may request from time to time.
- 12.1.2 Franchisor will inform Franchisee of any exclusive cooperation arrangements entered into by Franchisor with services companies, e.g., providing for financial services, such as banks, insurance companies or other vendors offering services tailored for use by real estate professionals.
- 12.2 Exchange of Information: The parties hereby mutually agree to exchange ideas and suggestions for amendments and improvements to the ENGEL & VÖLKERS System.
- 6.9 Operations Under the ENGEL & VÖLKERS Name: Franchisee hereby agrees to operate its Residential Real Estate Brokerage for the types of property covered by this Agreement solely under the ENGEL & VÖLKERS trade name (as defined in Section 4.5 and Appendix 1).
- 25.1 No Relationship with ENGEL & VÖLKERS GROUP and Parent. Franchisee acknowledges and agrees that neither the Engel & Völkers Group nor the Parent are a party to this Agreement or bound to Franchisee in any way by this Agreement.
- 26.1 Governing Law: This Agreement; all relations between the parties hereto (and all relations with any third party beneficiary hereto); and, any and all disputes between Franchisee and its affiliates, owners, management, employees, or contractors, on the one hand, and Franchisor and/or any other Indemnified Parties, on the other hand, whether such dispute sounds in law, equity or otherwise, is to be exclusively construed in accordance with and/or governed by (as applicable) the law of the State of New York without recourse to New York (or any other) choice of law or conflicts of law principles.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to the 2025 Engel & Volkers Franchise Disclosure Document, the franchisor's obligations are centered around maintaining the Engel & Volkers system and supporting franchisees in their business operations. While the document emphasizes the franchisee's role as an independent contractor responsible for day-to-day decisions, Engel & Volkers commits to providing support, advice, and resources to protect its brand and assist franchisees. This includes informing franchisees of exclusive cooperation arrangements with service companies and exchanging ideas for system improvements. Engel & Volkers retains the right to adapt the system to specific market conditions, which may require additional investment from the franchisee.
Engel & Volkers also has obligations regarding the brand's reputation and standards. Franchisees must operate under the Engel & Volkers trade name and adhere to the system's documentation. The franchisor can direct franchisees to take actions to mitigate risks to the brand's reputation and may request information to prepare its Franchise Disclosure Document. Franchisees are expected to maintain high professional standards and resolve disputes promptly and fairly.
It is important to note that the Engel & Volkers Group and Parent are not parties to the franchise agreement, and franchisees must look solely to the franchisor for performance of obligations. The agreement is governed by New York law. While Engel & Volkers aims to support its franchisees, the franchisee bears significant responsibility for compliance, financial obligations, and maintaining brand standards, highlighting the importance of a thorough understanding of the franchise agreement.