What optional remedies does Engel & Volkers have if a franchisee fails to pay amounts due?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.5 Optional Remedy**:** If Franchisee fails to timely pay any amounts due to Franchisor or one of its affiliates, or if Franchisee is in material breach of any obligation under this Agreement, Franchisor may, in addition to or in lieu of its remedy under Section 20.4 or otherwise provided in this Agreement: (i) withhold Franchisee's access to the Integrated Product Suite described in Section 7 and any other services or goods, such as the GG Magazine, that Franchisor or its affiliates are obligated to provide hereunder until such time as Franchisee's payments are current; and/or (ii) rescind any terms to this Agreement that were negotiated between the parties, including reducing Franchisee's Protected Area.
Examples of material breaches of Franchisee's obligations under this Agreement include failure to timely pay any amounts due when payable and failure to timely submit reports required hereunder.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if a franchisee fails to pay amounts due to Engel & Volkers or is in material breach of any obligation under the Franchise Agreement, Engel & Volkers has optional remedies. In addition to or in lieu of remedies under Section 20.4 or otherwise provided in the agreement, Engel & Volkers may (i) withhold the franchisee's access to the Integrated Product Suite described in Section 7 and any other services or goods, such as the GG Magazine, that Engel & Volkers or its affiliates are obligated to provide until the franchisee's payments are current; and/or (ii) rescind any terms to the agreement that were negotiated between the parties, including reducing the franchisee's Protected Area.
Engel & Volkers considers the failure to timely pay any amounts due when payable and failure to timely submit reports required under the agreement as examples of material breaches of the franchisee's obligations.
These remedies provide Engel & Volkers with flexibility in addressing payment defaults, allowing them to take actions such as withholding services or renegotiating terms of the agreement before resorting to termination. For a prospective franchisee, this means that Engel & Volkers has options to work with them to resolve payment issues, but also has the ability to reduce the scope of the franchise or withhold support if payments are not made current. Franchisees should be aware of these potential consequences and ensure they understand the payment terms and obligations outlined in the Franchise Agreement.