Are the Principals of an Engel & Volkers franchisee also required to abide by all United States government economic sanctions requirements?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 26.11.5 Franchisee and its Principals understand the requirements of, and will abide by, all United States government economic sanctions requirements throughout the Term.
Franchisee and its Principals represent and warrant that neither Franchisee nor any of its direct or indirect Principals, shareholders, owners, directors, managers, affiliates, employees or agents, nor any funding source Franchisee utilizes, is or will be identified on the list of the U.S.
Treasury's Office of Foreign Assets Control (OFAC) or is or will be a person subject to trade restrictions under United States law, including (without limitation) the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the Trading with the Enemy Act, 50 U.S.C.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, both the franchisee and its Principals must adhere to all United States government economic sanctions requirements throughout the term of the franchise agreement. A Principal is defined as an owner that owns ten percent (10%) or more of Franchisee. This obligation ensures that the Engel & Volkers franchise operates in compliance with U.S. law and helps to protect the brand's reputation.
Engel & Volkers also requires that neither the franchisee nor any of its direct or indirect Principals, shareholders, owners, directors, managers, affiliates, employees, or agents, nor any funding source the franchisee utilizes, is or will be identified on the list of the U.S. Treasury's Office of Foreign Assets Control (OFAC) or is or will be a person subject to trade restrictions under United States law. This includes laws such as the International Emergency Economic Powers Act and the Trading with the Enemy Act.
This requirement places a significant responsibility on the franchisee to conduct thorough due diligence on all parties involved in the business, including owners, investors, and funding sources. Failure to comply with these regulations could result in severe penalties, including fines and legal repercussions, for both the franchisee and Engel & Volkers. Prospective franchisees should carefully review these requirements and ensure they have the resources and systems in place to maintain compliance.