For Engel & Volkers, is the ongoing royalty payment subject to a Minimum Annual Royalty?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
sor on Gross Revenue in a lower Gross Revenue tier.
Royalty Schedule
| Tier | Annual Gross Revenues (reported and paid on a calendar year basis) | Royalty Rate | |
|---|---|---|---|
| From | To | ||
| 1 | $0 | $1,000,000 | 6.00% |
| 2 | $1,000,000.01 | $2,000,000 | 5.50% |
| 3 | $2,000,000.01 | $5,000,000 | 5.00% |
| 4 | $5,000,000.01 | $10,000,000 | 4.50% |
| 5 | $10,000,000.01 | $20,000,000 | 4.25% |
| 6 | $20,000,000.01 | $30,000,000 | 4.00% |
| 7 | $30,000,000.01 | and above | 3.75% |
If the sum of all Royalties for a calendar year during the Term is below $60,000 ("Minimum Annual Royalty"), upon notice from Franchisor, Franchisee will be required to pay to Franchisor the difference between the Royalty actually paid by Franchisee on Gross Revenues for such calendar year and $60,000, provided, however, further, that should the Payment Start Date (as defined hereinafter) not fall on January 1 of a calendar year or should this Agreement terminate or expire on a date other than December 31 of a calendar year during the Term, the Minimum Annual Royalty will be determined pro rata temporis the number of full calendar months in that calendar year from the Payment Start Date through the end of the cale
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the ongoing royalty payment is subject to a Minimum Annual Royalty. If the total royalties paid for a calendar year are less than $60,000, Engel & Volkers will notify the franchisee, who must then pay the difference between the royalties already paid and the $60,000 minimum.
However, the Minimum Annual Royalty is prorated if the Payment Start Date does not fall on January 1st, or if the agreement terminates or expires before December 31st of a given year. In these cases, the minimum royalty is adjusted based on the number of full calendar months from the Payment Start Date to the end of the year, or until the agreement's termination or expiration date.
Engel & Volkers requires the franchisee to pay the outstanding amount within ten days of receiving the invoice. Each January 1st, the calculation of Gross Revenues resets to $0, and the royalty rate starts at six percent (6%) on all Gross Revenues. Franchisees must then meet the Gross Revenue tiers to reduce their royalties for that calendar year.