What happens if execution is levied against an Engel & Volkers franchisee?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency, reorganization, receivership or other similar law now or hereafter in effect, or consent to the entry for an order for relief in an involuntary proceeding or to the conversion of an involuntary proceeding to a voluntary proceeding, under any such law; a bill in equity or other proceeding for the appointment of a receiver or other custodian of Franchisee, the franchised Business, or any affiliate or Guarantor of the franchised Business, or the assets of any of them, is filed and consented to by Franchisee; a receiver or other custodian (permanent or temporary) of all or part of the assets or property of Franchisee, the franchised Business and any affiliate or Guarantor of the franchised Business is appointed by any court of competent jurisdiction; proceedings for a composition with creditors under any federal or state law are instituted by or against Franchisee, the franchised Business or any affiliate or Guarantor thereof; Franchisee, any affiliate of Franchisee or any Guarantor are dissolved; execution is levied against Franchisee, the franchised Business, any affiliate or Guarantor thereof and/or the property of any of the foregoing; the property of the franchised Business is sold after levy thereon by any governmental body or agency, sheriff, marshal or other person authorized under federal, state and/or local law; or, if Franchisee is a business entity, its governing body adopts any resolution or otherwise authorizes action to approve any of the foregoing activities.
- 20.3 Termination by Franchisor Without Opportunity to Cure: Franchisee shall be deemed to be in default under this Agreement, and Franchisor may, at its option, terminate this Agreement and all rights granted herein effective immediately or reduce or eliminate the Protected Area by written notice to Franchisee, without giving Franchisee an opportunity to cure the default, if Franchisee either:
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to the 2025 Engel & Volkers Franchise Disclosure Document, if execution is levied against an Engel & Volkers franchisee, the franchisor has grounds to terminate the franchise agreement without providing an opportunity for the franchisee to correct the issue. This means Engel & Volkers can immediately end the agreement and all rights granted to the franchisee. This clause also applies if execution is levied against any affiliate or guarantor of the franchised business, or their property.
This provision protects Engel & Volkers by allowing them to quickly disassociate from a franchisee facing significant financial or legal issues. The immediate termination clause bypasses the typical cure period, where franchisees are given time to rectify a default before termination. This is a stricter condition than in some franchise agreements, where a cure period is often provided.
For a prospective Engel & Volkers franchisee, this highlights the importance of maintaining strong financial health and avoiding legal issues. The franchisee's business, its affiliates, and any guarantors must all avoid having executions levied against them to prevent immediate termination of the franchise agreement. This clause underscores the need for careful financial management and legal compliance throughout the term of the franchise agreement.