What laws and regulations must an Engel & Volkers franchisee strictly comply with when operating their franchised business?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
of the Residential Real Estate Brokerage. As between the parties hereto, it will be Franchisee's responsibility to promptly investigate the need for, seek and obtain all government and quasi-governmental approvals, consents and licenses required to commence operations of the Residential Real Estate Brokerage. Franchisor makes no representation or warranty that Franchisee will be able to do so.
- 26.11.2 Without limiting the generality of the requirements of this Section, Franchisee agrees to strictly comply with all applicable laws, rules or regulations of any
nation, state, or other political/governmental subdivision governing the franchised Business.
- 26.11.3 Franchisee undertakes to operate its franchised Business in strict compliance with all applicable laws, rules and regulations of all governmental authorities; comply with all applicable wage, hour and other laws and regulations; prepare and file all necessary tax returns; pay all taxes imposed on Franchisee related to the Residential Real Estate Brokerage; obtain and keep in good standing all necessary licenses, permits and other required forms of governmental approval required for Franchisee to offer and sell the services and products which now or in the future are part of the ENGEL & VÖLKERS System; pay or cause to be paid prior to delinquency all taxes, fines, fees and/or assessments arising out of or in connection with the operation of its franchised Business; and, otherwise be responsible for compliance, at Franchisee's sole expense, with all governmental or quasigovernmental requirements, restrictions, duties and responsibilities.
- 26.11.4 Franchisee shall notify Franchisor in writing within five (5) days of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, which may adversely affect the operation or financial condition of Franchisee.
- 26.11.5 Franchisee and its Principals understand the requirements of, and will abide by, all United States government economic sanctions requirements throughout the Term. Franchisee and its Principals represent and warrant that neither Franchisee nor any of its direct or indirect Principals, shareholders, owners, directors, managers, affiliates, employees or agents, nor any funding source Franchisee utilizes, is or will be identified on the list of the U.S. Treasury's Office of Foreign Assets Control (OFAC) or is or will be a person subject to trade restrictions under United States law, including (without limitation) the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., or any Executive Orders or regulations promulgated thereunder (including Executive Order 13224 of September 24, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, and the Specially Designated Nationals and Blocked Persons List), the Patriot Act, or any other law, rule or regulation pertaining to immigration or terrorism ("Anti-Terrorism Laws"); is directly or indirectly owned or controlled by the government of any country that is subject to an embargo imposed by the United States government or by any individual that is subject to an embargo imposed by the United States government; is acting on behalf of any country or individual that is subject to such an embargo; or, is involved in business arrangements or other transactions with any country or individual that is subject to an embargo. Franchisee agrees to immediately notify Franchisor in writing upon the occurrence of any event which would render the foregoing representations and warranties incorrect. Notwithstanding anything to the contrary in this Agreement, Franchisee may not allow, effect or sustain any transfer, assignment or other disposition of this Agreement to a "Specially Designated National or Blocked Person" (as defined below) or to an entity in which a Specially Designated National or Blocked Person has an interest. For the purposes of this Agreement, "Specially Designated National or Blocked Person" means: (i) a person or entity designated by OFAC (or any successor officer agency of the U.S. government) from time to
time as a "specially designated national or blocked person" or similar status; (ii) a person or entity described in Section 1 of U.S. Executive Order 13224, issued on September 23, 2001; or, (iii) a person or entity otherwise identified by any government or legal authority as a person with whom Franchisee (or any of its owners or affiliates) or Franchisor' (or any of their respective owners or affiliates) are prohibited from transacting business. Franchisee further agrees that Franchisee will not hire, retain, employ or otherwise engage the services of any individual or entity in contravention of Anti-Terrorism Laws or any other legally prohibited individual or entity. Neither Franchisee nor its Principals shall engage in any activity that would expose Franchisor to a risk of criminal or civil penalties under applicable United States law. Any violation of the Anti-Terrorism Laws by Franchisee or its Principals, or any blocking of Franchisee's or its Principals' assets under the Anti-Terrorism Laws, shall constitute good cause for immediate termination of this Agreement and any other agreement Franchisee has entered into with Franchisor or any of its affiliates.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees must operate their business in strict compliance with all applicable laws, rules, and regulations from governmental authorities. This includes adhering to wage and hour laws, preparing and filing necessary tax returns, and paying all taxes related to the residential real estate brokerage. Franchisees are also required to obtain and maintain all necessary licenses and permits needed to offer and sell services and products that are part of the Engel & Volkers system. They must also pay all taxes, fines, fees, and assessments associated with operating their franchised business. Engel & Volkers requires franchisees to notify them within five days of any action, suit, proceeding, order, writ, injunction, award, or decree that may adversely affect their operation or financial condition. Franchisees must also abide by all United States government economic sanctions requirements throughout the term of their agreement. Franchisees must comply with all federal and state information data privacy and data security laws and regulations applicable to the franchised business. These laws pertain to the information collected from customers, prospective customers, sales advisors, staff members, and other third parties, including data protection laws, marketing communications regulations, and information security regulations.
Engel & Volkers franchisees must implement adequate security measures to protect the confidentiality of financial, personal, and sensitive information collected from customers, sales advisors, staff, and other third parties. They must provide written notice of the Engel & Volkers system's privacy policies and the uses of financial information, as well as provide prior written notice of any disclosure of financial information. Franchisees must also provide customers, sales advisors, staff, and other third parties with notice of any opt-out rights regarding the use of their financial information and an opportunity to exercise those rights. Engel & Volkers may formulate policies and practices concerning security measures, privacy policy notices, disclosure notices, and opt-out notices, which franchisees must adopt and implement in a timely manner.
Engel & Volkers franchisees must observe and obey all federal, state, and local laws, official regulations, and decrees applicable in the state where their approved location is situated, as well as anywhere else they conduct business under the agreement. This includes licensing as a real estate broker and any other licenses and permits required for their business operations. Franchisees must provide Engel & Volkers with a current copy of their real estate broker license annually by January 31. They must also abstain from any actions that Engel & Volkers has expressly agreed not to perform in agreements with third parties or is legally obliged to abstain from. Franchisees are liable for any damage or loss incurred by Engel & Volkers as a result of their failure to comply with these undertakings. Engel & Volkers recommends that franchisees use standard contract terms consistent with local law when providing residential real estate broker services.