Does operating an Engel & Volkers Administrative Location fulfill the franchisee's obligation to establish and operate an Approved Location as set forth in the Franchise Agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| THIS | LIMITED PURPOSE ADMINSTRATIVE LOCATION ADDENDUM ("Administrative Location Addendum") is made and entered into this (the "Effective Date") by and between ENGEL & VÖLKERS AMERICAS, INC., a Delaware corporation ("Franchisor"), and, a ("Franchisee"). |
|---|---|
| as set forth in the FA. | WHEREAS, Franchisor and Franchisee entered into a Franchise Agreement, dated (the |
| "FA") providing Franchisee with the right to use the ENGEL & VÖLKERS System to operate an Engel & | |
| Völkers Residential Real Estate Brokerage and conduct the franchised Business at an Approved Location | |
| WHEREAS, Franchisee has requested to operate an additional location within Franchisee's | |
| Protected Area for the limited purpose of housing Franchisee's administrative and support personnel and | |
| related administrative tasks for Franchisee's franchised Business. | |
| FA. | NOW THEREFORE, in consideration of the provisions in the FA, the promises in this |
| Administrative Location Addendum, and other good and valuable consideration, the delivery, receipt, and | |
| sufficiency of which are acknowledged, the parties mutually agree as set forth below. All capitalized terms | |
| not defined in this Administrative Location Addendum shall have the respective meanings set forth in the | |
| 1. | Grant of Limited Purpose Administrative Location: |
| 1.1 | Franchisor hereby grants Franchisee the non-exclusive, non-transferrable right to |
| establish and operate a Limited Purpose Administrative Location at, and only at the | |
| following | |
| location: | |
| (the | |
| "Administrative | |
| Location") within Franchisee's Protected Area subject to the terms of this Administrative | |
| Location Addendum and the FA. | |
| 1.2 | Franchisee acknowledges and agrees that the Administrative Location is not deemed to |
| be nor does it constitute, replace or otherwise amend Franchisee's obligation to establish | |
| and operate an Approved Location as set forth in the FA. | |
| 1.3 | Franchisee may not relocate the Administrative Location without Franchisors prior |
| written consent. Operating this Administrative Location does not guarantee Franchisor's | |
| consent to grant another limited purpose location or extend the Term of this | |
| Administrative Location (as set forth hereinafter), which remains at Franchisor's sole | |
| discretion. | |
| 1.4 | Franchisee further acknowledges and agrees that it has no right of first refusal, option or |
| similar rights to acquire additional franchises, or a right to operate any additional | |
| administrative location, which Franchisor grants in its sole discretion. |
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, operating an Administrative Location does not fulfill the franchisee's obligation to establish and operate an Approved Location, as defined in the Franchise Agreement. The Administrative Location serves a limited purpose, specifically to house administrative and support personnel and perform administrative tasks related to the franchised business. Engel & Volkers grants franchisees the right to establish and operate this Limited Purpose Administrative Location within their Protected Area, subject to the terms outlined in the Administrative Location Addendum and the Franchise Agreement.
The Administrative Location is not considered a replacement or amendment to the franchisee's responsibility to establish and operate an Approved Location. Engel & Volkers franchisees must secure prior written consent from the franchisor before relocating the Administrative Location. Furthermore, operating an Administrative Location does not guarantee the franchisee the right to secure additional limited purpose locations or extend the term of the Administrative Location agreement, as these decisions remain at Engel & Volkers's sole discretion.
Engel & Volkers franchisees do not have any right of first refusal or option to acquire additional franchises or operate additional administrative locations. The franchisor retains the sole discretion to grant these rights. This distinction is important for prospective franchisees to understand, as it clarifies that the Administrative Location is an additional option and not a substitute for the primary obligation of operating an Approved Location for conducting real estate brokerage services.