Are oral statements considered part of the Engel & Volkers business relationship?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
hereinafter called the "Approved Location"). If, as of the date of this Agreement, the Approved Location has not yet been determined, then it shall thereafter be determined in accordance with Section 3.1 and, upon determination, inserted into Appendix 1. Franchisor is prepared to grant Franchisee, at its request, a franchise to use the ENGEL & VÖLKERS System to operate a residential real estate brokerage at the Approved Location and to use commercially reasonable efforts to support Franchisee.
- 1.5 Independent Investigation: Franchisee has independently investigated the business risks involved and such other matters as Franchisee deems important, including current and potential market conditions and competitive factors and risks, has read Franchisor's Franchise Disclosure Document, and has not relied on any representations not set forth in this Agreement. Aware of the relevant facts, Franchisee desires to enter into this Agreement to obtain a franchise to use the ENGEL & VÖLKERS System to operate a residential real estate brokerage at the Approved Location. Franchisee agrees that it will bear the financial risk involved in operation of the real estate brokerage.
2. Nature of Franchise
- 2.1 Grant of Franchise: Subject to the terms of this Agreement, Franchisor hereby grants to Franchisee the non-exclusive right to establish and operate an ENGEL & VÖLKERS® residential real estate brokerage at the Approved Location for the provision of real estate brokerage services with respect to residential properties of the type permitted under Section 2.2 using the ENGEL & VÖLKERS System and Trademarks (the "Residential Real Estate Brokerage").
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the franchise agreement explicitly states that franchisees cannot rely on any representations not set forth in the agreement. Specifically, the document emphasizes that franchisees conduct their own independent investigations and acknowledge that no income, earnings, or growth representations have been made by Engel & Volkers or its affiliates outside of the written agreement. This is a standard clause in franchise agreements designed to prevent misunderstandings and disputes based on verbal promises.
Engel & Volkers requires franchisees to confirm they have had adequate opportunity to study the Engel & Volkers System and verify statements made by the franchisor. Franchisees also acknowledge that they have taken note of and verified these statements and the contents of the appendices, which are integral parts of the agreement. This confirmation aims to ensure that franchisees are fully informed about the franchise opportunity and that their decisions are based on verified information rather than unverified claims.
The practical implication for a prospective Engel & Volkers franchisee is that any promises or assurances made during the sales process that are not explicitly written into the franchise agreement are not legally binding. Therefore, it is crucial for potential franchisees to conduct thorough due diligence, seek legal counsel, and ensure that all important terms and conditions are included in the written agreement. This protects both the franchisor and franchisee by providing a clear and comprehensive record of the agreed-upon terms and expectations. Franchisees should be wary of relying on verbal statements and instead focus on the documented information provided in the Franchise Disclosure Document and the franchise agreement itself.