Where must litigation arising from the Engel & Volkers franchise agreement be instituted?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Recipient further agrees that any litigation arising out of or related to this Agreement; any breach of this Agreement; and, all relations and any and all disputes between Recipient on the one hand, and Franchisor on the other hand, whether sounding in contract, tort, or otherwise, will be instituted exclusively in a state or federal court of competent jurisdiction located in New York, NY.
Recipient agrees that any dispute as to the venue for this litigation will be submitted to and resolved exclusively by a state or federal court of competent jurisdiction situated in New York, NY.
Recipient hereby waives and covenants 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).
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, any litigation related to the franchise agreement must be instituted in a state or federal court located in New York, NY. The franchisee also agrees to resolve any disputes about the venue exclusively in these courts.
This means that if a franchisee has a legal dispute with Engel & Volkers, they will likely need to travel to New York to pursue the case, regardless of where their franchise is located. This could significantly increase the cost of litigation for the franchisee, as they would need to pay for travel expenses, local counsel, and other related costs. Engel & Volkers is effectively choosing the location of legal battles, which may be more favorable to them.
The franchisee also waives the right to argue that New York is an improper or inconvenient venue. This waiver prevents the franchisee from arguing that the case should be heard in a location closer to their business or where the relevant events occurred. This clause is common in franchise agreements, as it provides the franchisor with predictability and consistency in legal proceedings. However, it can put the franchisee at a disadvantage, especially if they are a small business with limited resources.
Prospective Engel & Volkers franchisees should carefully consider this venue provision and understand the potential costs and inconveniences associated with litigating in New York. They may want to consult with an attorney to discuss the implications of this clause and whether it is negotiable.