What obligations does an Engel & Volkers franchisee have regarding pre-opening purchases/leases (Item 9) and how are these affected by the restrictions on sources of products and services (Item 8)?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligations | Section in agreement | Disclosure document item |
|---|---|---|
| b. Pre-opening purchases/ leases | FA§3.3 | Items 7 and 8 |
You must comply with all of our mandatory standards, methods, policies, products, procedures, techniques, standards and specifications that we prescribe in the Systems Documentation or other written or electronic communications, including any requirement to purchase or lease goods, services, supplies, fixtures, equipment, inventory, computer hardware and software, real estate or comparable items related to establishing or operating the franchised business from us, our designees, or suppliers approved by us or under our specifications.
We currently require that you purchase from us, one of our affiliates, or suppliers approved by us, certain marketing materials, including pens, printed materials and brochures that feature the Trademarks. As discussed below, you will have to place advertisements within the GG Magazines from Grund Genug Verlag. However, if we grant you a franchise to operate multiple Approved Locations, you must place at least 1 full page advertisement per year for the first and second Approved Location, at least 1 additional full page advertisement per year for the third and fourth Approved Location and at least 1 additional advertisement per year for five or subsequent Approved Location, for a maximum of 3 required ads per year total. This number may vary in future. See Item 11. We reserve the right to designate one or more third parties, ourselves or an affiliate to supply you with certain categories of other goods or services. Currently, Grund Genug Verlag is an approved supplier. At this time, there are no other approved suppliers.
You must purchase or lease a phone and copy machine from independent vendors for the operation of your Residential Real Estate Brokerage. We may require you to purchase or acquire certain computer hardware and/or software as deemed necessary for the operation of your franchised business within our system. We may set standards in the System Documentation for computer hardware and software. You may purchase the appropriate computer hardware from many different suppliers (for minimum
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees have obligations regarding pre-opening purchases and leases, as detailed in Item 9 and cross-referenced with Item 8 of the agreement. Specifically, Item 9 outlines that pre-opening purchases and leases are addressed in Section 3.3 of the Franchise Agreement and further detailed in Items 7 and 8 of the disclosure document. This means franchisees must adhere to the guidelines set forth for acquiring necessary items to start their Engel & Volkers real estate brokerage.
Item 8 places restrictions on the sources from which franchisees can obtain products and services. Franchisees must comply with mandatory standards, methods, policies, and specifications prescribed in the System Documentation or other written communications. This includes purchasing or leasing goods, services, supplies, fixtures, equipment, computer hardware/software, and even real estate from Engel & Volkers, their designees, or approved suppliers. Engel & Volkers requires franchisees to purchase certain marketing materials, such as pens, printed materials, and brochures featuring trademarks, from them, their affiliates, or approved suppliers. Franchisees also need to place advertisements within the GG Magazines from Grund Genug Verlag, with specific requirements based on the number of approved locations they operate.
These restrictions ensure brand consistency and quality control across all Engel & Volkers franchises. While franchisees can purchase phones and copy machines from independent vendors, Engel & Volkers may require specific computer hardware and software outlined in the System Documentation. Franchisees must also use standard Engel & Volkers email addresses and signatures. These requirements impact pre-opening purchases by limiting the franchisee's choice of suppliers and ensuring that all purchased items meet the franchisor's standards. This can potentially increase initial costs if Engel & Volkers' approved suppliers are more expensive than other available options. However, it also ensures that the franchise operates in accordance with the brand's established standards, which can be beneficial in terms of brand recognition and customer trust.
Engel & Volkers also provides assistance before the opening of the franchised business, including designating a protected area, approving the location, authorizing the use of trademarks, providing access to the Engel & Volkers System and international network, and providing training courses. They also make available marketing materials and products and provide specifications regarding the Brokerage Design for equipment, signs, and fixtures. However, Engel & Volkers does not assist with conforming the premises to local ordinances and building codes, obtaining required permits, or constructing, remodeling, or decorating the premises.