What law governs disputes between an Engel & Volkers franchisee and the franchisor's indemnified parties?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
and their affiliates are each intended to be a third party beneficiary of this Agreement. Except as otherwise expressly provided herein, nothing in this Agreement is intended, nor shall be deemed, to confer any rights or remedies upon any person or legal entity not a party hereto. Franchisee hereby understands, acknowledges and agrees that the Engel & Völkers Group, its Parent, E&V Marken, Grund Genug Verlag and their affiliates, as third party beneficiaries under this Agreement, have the absolute right to enforce all of the terms and provisions of this Agreement should Franchisor fail or otherwise refuse to do so.
26. Miscellaneous Provisions
- 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. If, however, any provision of this Agreement is not enforceable under the laws of New York, and if the franchised Business is located outside of New York and the provision would be enforceable under the laws of the state in which the franchised Business is located, then that provision (and only that provision) will be interpreted and construed under the laws of that state. This Section 26.1 is not intended to invoke, and shall not be deemed to invoke, the application of any franchise, business opportunity, antitrust, unfair competition, fiduciary or any other doctrine of law of the State of New York which would not otherwise apply by its terms jurisdictionally or otherwise but for the within designation of governing law.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the laws of the State of New York govern disputes between the franchisee and the franchisor or other indemnified parties. Specifically, this applies to the construction and governance of the franchise agreement, the relationship between all involved parties, and any disputes that may arise. This is without regard to New York's (or any other) choice of law or conflicts of law principles.
This means that any legal issues or disagreements will be interpreted and resolved according to New York law, regardless of where the Engel & Volkers franchise is located. However, there is an exception: if any provision of the agreement is unenforceable under New York law, but is enforceable under the laws of the state where the Engel & Volkers business is located, then that specific provision will be governed by the laws of that state.
For a prospective Engel & Volkers franchisee, this clause is significant because it dictates the legal framework within which their franchise agreement operates. Franchisees should become familiar with New York law, or the laws of their own state if the exception applies, to understand their rights and obligations. This also means that any litigation will be instituted exclusively in a state or federal court of competent jurisdiction located in New York, NY. Franchisees also waive and covenant never to assert or claim that said venue is for any reason improper, inconvenient, prejudicial or otherwise inappropriate (including, without limitation, any claim under the judicial doctrine of forum non conveniens).
It is typical for franchise agreements to include governing law and venue selection clauses. Franchisees should seek legal counsel to fully understand the implications of these clauses and how they may affect their business.