What individuals must an Engel & Volkers franchisee cause to refrain from competitive activities?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
16.1 Competition During Term of Agreement: Franchisee hereby agrees not to provide residential or commercial real estate brokerage services, or any component thereof, competing with the ENGEL & VÖLKERS System during the Term (as defined hereinafter), either directly or indirectly, in an employed or a self-employed capacity, for its own account or for the account of a third party, as a proprietor, partner, investor, shareholder, member, director, manager, officer, employee, principal, agent, advisor, consultant, lessor, sublessor or any similar capacity, either from an Approved Location or any other geographic location whatsoever. Moreover, any spouse, domestic partner or immediate family member of any of Franchisee's Principal(s) may not provide residential or commercial real estate brokerage services, or any component thereof, competing with the ENGEL & VÖLKERS System during the Term of this Agreement (as defined hereinafter), either directly or indirectly, in an employed or a self-employed capacity, for its own account or for the account of a third party, as a proprietor, partner, investor, shareholder, member, director, manager, officer, employee, principal, agent, advisor, consultant, lessor, sublessor or any similar capacity, unless such services are outside a seventy five (75) mile radius of any Approved Location of Franchisee. With the prior written approval of Franchisor, Franchisee may engage in other business activities that do not involve other competitive residential or commercial real estate agency services. However, all these activities must be conducted through a separate legal entity and another trade name and in a manner (including from a separate location if Franchisor, in its sole judgment, believes it is necessary) that eliminates the prospect that the public might believe the business is related to the ENGEL & VÖLKERS System in any way. Franchisor reserves the right to establish policies and procedures in the System Documentation about keeping these activities separate from the franchised Business.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchisee must agree not to provide residential or commercial real estate brokerage services that compete with the Engel & Volkers system during the term of the agreement. This restriction applies whether the franchisee is acting directly or indirectly, in an employed or self-employed capacity, or for their own account or a third party's account. The restriction covers various roles such as proprietor, partner, investor, shareholder, member, director, manager, officer, employee, principal, agent, advisor, consultant, lessor, or sublessor. This non-compete obligation applies regardless of the geographic location.
Furthermore, the non-compete extends to the franchisee's spouse, domestic partner, or immediate family members who are principals of the franchisee. These individuals are also prohibited from providing competitive residential or commercial real estate brokerage services during the term of the agreement, under similar conditions as the franchisee. However, this restriction does not apply if such services are provided outside a 75-mile radius of any approved Engel & Volkers location of the franchisee.
An Engel & Volkers franchisee may engage in other business activities that do not involve competitive residential or commercial real estate agency services, provided they obtain prior written approval from Engel & Volkers. These activities must be conducted through a separate legal entity and under a different trade name, in a manner that prevents the public from associating the business with the Engel & Volkers system. Engel & Volkers reserves the right to establish policies and procedures in the System Documentation to ensure these activities remain separate from the franchised business.