Is the Engel & Volkers guarantee absolute and unconditional?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
further understands and agrees
that Recipient's obligations hereunder may not be assigned by Recipient without the prior written consent of Franchisor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day, month, and year first above written.
| Recipient: | ACKNOWLEDGED BY FRANCHISOR: |
|---|---|
| Signature: | ENGEL & VÖLKERS AMERICAS, INC. |
| Print Name: | |
| Position with Franchisee: | By: |
| Date of signature: | Title: |
| Home address: | Date of signature: |
| By: Title: Date of signature: |
Appendix 4
PRINCIPAL'S GUARANTEE AND ASSUMPTION OF OBLIGATIONS
PRINCIPAL'S GUARANTEE AND ASSUMPTION OF OBLIGATIONS
| Franchise Agreement dated _ | (the "Franchise Agreement") by and between ENGEL |
|---|---|
| & VÖLKERS AMERICAS, INC. ("Franchisor") and | ("Franchisee"), and |
| for other good and valuable consideration, each of the undersigned hereby, for themselves, their heirs, | |
| successors and assigns, jointly, individually and severally, personally, absolutely and unconditionally: | |
| (1) guarantees to Franchisor and its parent and affiliates and their successors and assigns, for the term of | |
| the Franchise Agreement and thereafter as provided in the Franchise Agreement, that Franchisee shall | |
| punctually pay and perform each and every undertaking, agreement and covenant set forth in the Franchise | |
| Agreement and any documents, agreements, instruments and promissory notes executed pursuant to or in | |
| connection with the Franchise Agreement (collectively, the "Franchise Documents"); and (2) agrees to be | |
| personally bound by, and personally liable for the breach of, each and every provision in the Franchise | |
| Documents applicable to Principals of Franchisee. If more than one person has executed this Guarantee, | |
| the term "the undersigned", as used herein, shall refer to each such person, and the liability of each of the | |
| undersigned hereunder shall be joint and several and primary as sureties. The undersigned waives: |
- (i) acceptance and notice of acceptance by Franchisor of the foregoing undertakings;
- (ii) notice of demand for payment of any indebtedness or nonperformance of any obligations hereby guaranteed;
- (iii) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
- (iv) any right the undersigned may have to require that an action be brought against Franchisee or any other person as a condition of liability; and
- (v) any and all other notices and legal or equitable defenses to which the undersigned may be entitled.
The undersigned consents and agrees that:
- (i) the undersigned's direct and immediate liability under this Guarantee shall be joint and several with all signatories to this and similar guaranties of Franchisee's obligations;
- (ii) the undersigned shall render any payment or performance required under the Franchise Agreement upon demand if Franchisee fails or refuses punctually to do so;
- (iii) this Guarantee shall apply to any claims Franchisor may have due to return of any payments or property Franchisor or its Affiliates may have received from Franchisee as a preference, fraudulent transfer or conveyance or the like in any legal proceeding;
- (iv) such liability shall not be contingent or conditioned upon pursuit by Franchisor of any remedies against Franchisee or any other person;
- (v) such liability shall not be diminished, relieved or otherwise affected by any extension of time, credit or other indulgence which Franchisor may from time to time grant to Franchisee or to any other person, including without limitation the
acceptance of any partial payment or performance, or the compromise or release of any claims, none of which shall in any way modify or amend this Guarantee, which shall be continuing and irrevocable during and after the terms of the License Documents until Franchisee's duties and obligations to Franchisor and all of its parent and affiliates are fully discharged and satisfied; and
(vi) the undersigned shall pay Franchisor's court costs and reasonable attorney's fees in enforcing or collecting on this Guarantee.
The undersigned hereby agree, furthermore, that without the consent of or notice to any of the undersigned and without affecting any of the obligations of the undersigned hereunder: (a) any term, covenant or condition of the Franchise Agreement may be amended, compromised, released or otherwise altered by Franchisor and Franchisee, and the undersigned do guarantee and promise to perform all the obligations of Franchisee under the Franchise Agreement as so amended, compromised, released or altered; (b) any guarantor of or party to the Franchise Agreement may be released, substituted or added; (c) any right or remedy under the Franchise Agreement, this Guarantee or any other instrument or agreement between Franchisor and Franchisee may be exercised, not exercised, impaired, modified, limited, destroyed or suspended; and, (d) Franchisor or any other person may deal in any manner with Franchisee, any of the undersigned, any party to the Franchise Agreement or any other person.
Any waiver, extension of time or other indulgence granted by Franchisor or its agents, successors or assigns, with respect to the Franchise Agreement or any other agreement(s) by and between Franchisee and Franchisor, shall in no way modify or amend this Guarantee, which shall be continuing, absolute, unconditional and irrevocable.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the guarantee provided by the franchisee and their owners is described as "personally, absolutely and unconditionally" ensuring the franchisee will punctually pay and perform every obligation under the Franchise Agreement and related documents. This guarantee extends for the term of the Franchise Agreement and beyond, as specified in the agreement. This means that the personal assets of the franchisee and potentially their owners are at risk if the Engel & Volkers franchise fails to meet its financial and contractual obligations.
However, the document also states that a general release does not extend to claims unknown at the time of executing the release, which, if known, would have materially affected the settlement. This suggests there are some limitations to the absolute nature of the guarantee, particularly concerning unforeseen claims. Furthermore, the agreement specifies that Engel & Volkers can alter the terms of the Franchise Agreement without notice to the guarantors, who remain bound to the altered obligations. This clause gives Engel & Volkers significant flexibility but also places a considerable risk on the franchisee and their guarantors, as they are bound by changes they may not be aware of or consent to.
In addition, the franchisee releases Engel & Völkers from all claims, known or unknown, that the franchisee may have against them. This release is intended to be full and unconditional, but in Maryland and Washington, the release does not apply to liability under their respective franchise laws. This means that while the guarantee appears absolute, there are legal and situational nuances that could affect its enforceability. Prospective franchisees should seek legal counsel to fully understand the implications of these clauses and the extent of their personal liability under the guarantee, especially considering the franchisor's ability to modify the agreement terms.