When is the Liquidated damages fee due to Engel & Volkers?

According to Engel & Volkers' 2025 Franchise Disclosure Document, the liquidated damages fee is due upon demand. This fee is payable if the Franchise Agreement is terminated due to the franchisee's breach of contract.

The FDD also specifies how the liquidated damages are calculated. Typically, the amount is equal to the average monthly Royalty fees, National Marketing and Technology Fund contribution, and any other fees due, multiplied by the lesser of 24 months or the number of full calendar months remaining on the franchise term from opening to termination.

However, if the franchise agreement is terminated before the franchisee starts operating or before Royalty fees and National Marketing and Technology Fund contributions are due, the liquidated damages will be calculated differently. In this case, it will be based on what the combined monthly average of Royalty fees, National Marketing and Technology Fund contributions, and any other due fees would have been, had the agreement not been terminated, multiplied by 24 months. This calculation will be based on the monthly average of the gross revenue earned by the franchisee (or their owners) in the 12 months before the franchise agreement's effective date. If the franchisee did not previously operate a residential real estate brokerage, the liquidated damages will be equal to the minimum annual Royalty for 24 months and any other fees due and payable.