How much did E&V GmbH contribute to the Engel & Volkers settlement amount?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ions or cash flows. Nevertheless, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include money damages and, in such event, could result in a material adverse impact on the Company's consolidated financial position, results of operations or cash flows for the period in which the ruling occurs.
NOTE 11. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Litigation (Continued)
During 2023, a class action lawsuit that challenges residential real estate industry rules and practices for payment of buyer-broker commissions and certain alleged associated practices have been filed against the National Association of Realtors, several state associations, and various brokerages. On July 12, 2024, as a result of this class action lawsuit, the Company and E&V GmbH entered into an agreement resulting in a settlement amount of $6,900,000. The amount is to be paid i
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, E&V GmbH contributed $1,500,000 towards a settlement amount of $6,900,000. This settlement arose from a class action lawsuit challenging residential real estate industry rules and practices for payment of buyer-broker commissions. Engel & Volkers and E&V GmbH entered into an agreement on July 12, 2024, to settle this lawsuit.
The total settlement amount is to be paid in four equal annual installments of $1,725,000. The first payment was made in August 2024, with the remaining payments due in July of each subsequent year. The $1,500,000 contribution from E&V GmbH was outstanding as of December 31, 2024, but was collected in January 2025.
This information is relevant to prospective Engel & Volkers franchisees as it provides insight into the legal and financial obligations that Engel & Volkers may face. It also shows how Engel & Volkers manages and accounts for these obligations in its financial statements. Understanding these aspects can help a franchisee assess the financial stability and risk profile of the franchise system.