What must the proposed Engel & Volkers assignee comply with regarding the franchisor's ownership requirements?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 22.3.14 That if the assignee is a business entity, all of the requirements of its new Franchise Agreement concerning business entities must be complied with before Franchisor will execute the new Franchise Agreement and, as applicable, will continue to be complied with thereafter.
- 22.3.1 That the proposed assignee (meaning individual or business entity which, after the proposed assignment, will be the franchisee under this Agreement or under any successor/renewal agreement) applies to Franchisor for acceptance as a franchisee and demonstrates to Franchisor's satisfaction that the proposed assignee (and, if it is a business entity, each and every Principal owner and guarantor of the proposed assignee) possesses the skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume the duties and obligations under this Agreement or any successor agreement.
Franchisee must pay the costs of any investigation required to be conducted by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, if a franchisee wishes to assign their franchise to a third party, the proposed assignee must meet certain ownership requirements. Specifically, if the assignee is a business entity, it must comply with all the requirements of Engel & Volkers' new Franchise Agreement concerning business entities before the franchisor will execute the new Franchise Agreement. These requirements will also continue to be complied with after the agreement is executed.
Furthermore, Engel & Volkers requires that the proposed assignee applies for acceptance as a franchisee and demonstrates that they (and each principal owner and guarantor, if a business entity) possess the necessary skills, qualifications, financial condition, background, history, reputation, economic resources, education, managerial and business experience, moral character, credit rating, and ability to fulfill the obligations under the Franchise Agreement or any successor agreement. The franchisee is responsible for covering the costs of any investigation conducted by Engel & Volkers to assess the proposed assignee.
These stipulations ensure that any new franchisee taking over an existing Engel & Volkers location meets the franchisor's standards for competence, financial stability, and adherence to the brand's values. This protects the Engel & Volkers brand and the interests of other franchisees within the system. It is common practice in franchising to have such requirements to maintain consistency and quality across the franchise network.