Is Engel & Volkers obligated to repurchase a franchisee's inventory of materials upon termination or expiration of the franchise agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.2 Repurchase of Products Covered by this Agreement: Upon termination or expiration of this Agreement, Franchisor may, at its sole discretion, agree to take back all or part of Franchisee's inventory of materials at the original purchase price, subject to the proviso that these are undamaged and suitable for transportation and sale. Franchisor may also agree to repurchase at actual market value any damaged goods not fit for sale.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers is not obligated to repurchase a franchisee's inventory upon termination or expiration of the franchise agreement. Instead, Engel & Volkers has the option, at its sole discretion, to repurchase all or part of the franchisee's inventory of materials.
If Engel & Volkers chooses to repurchase the inventory, it will do so at the original purchase price. However, this is subject to the condition that the materials are undamaged and suitable for transportation and sale. Engel & Volkers may also agree to repurchase damaged goods that are not fit for sale at their actual market value.
This discretionary repurchase policy is not uncommon in franchising. It means that an Engel & Volkers franchisee may need to dispose of unsold inventory themselves if the franchise is terminated or expires and Engel & Volkers does not elect to repurchase the materials. Franchisees should factor this potential loss into their financial planning.