What happens if an Engel & Volkers franchisee continues to operate the franchised business after the termination or expiration of the agreement without a written agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.3 Any continuance of business relations between Franchisor and Franchisee after the termination or expiration of this Agreement will not constitute, and may not be construed as, a reinstatement, renewal, extension or continuation of this Agreement unless Franchisee and Franchisor expressly agree in writing to any such renewal, extension or continuation. If Franchisee continues to operate the franchised Business after the termination or expiration of the Term, without any further agreement in writing signed by Franchisor, such continuation will be a violation of Franchisor's rights to the ENGEL & VÖLKERS System and the Trademarks, provided that Franchisee's obligations as set forth in this Agreement and Franchisor's rights will continue to apply until such time that Franchisee ceases operations under the ENGEL & VÖLKERS System and the Trademarks.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, if a franchisee continues to operate the franchised business after the termination or expiration of the franchise agreement without a written agreement signed by Engel & Volkers, it constitutes a violation of Engel & Volkers's rights to their system and trademarks. However, the franchisee's obligations and Engel & Volkers's rights, as outlined in the agreement, will remain in effect until the franchisee ceases operations under the Engel & Volkers system and using their trademarks.
This means that even after the agreement's termination or expiration, the franchisee is not free to simply continue operating as before. Engel & Volkers can take action to protect its brand and system. The franchisee is still bound by the original agreement's terms until they completely stop using the Engel & Volkers system and trademarks.
For a prospective Engel & Volkers franchisee, this highlights the importance of either renewing the franchise agreement properly or ceasing all operations related to the Engel & Volkers brand upon termination or expiration. Failure to do so could lead to legal repercussions and continued obligations under the original agreement, even without a formal, written extension.
This clause protects Engel & Volkers's brand and system by preventing franchisees from continuing to benefit from the brand's reputation and resources after the agreement ends, unless a formal renewal or extension is in place. It ensures a clean break and protects Engel & Volkers's intellectual property rights.