Does Engel & Volkers provide any guarantee that a franchisee will be able to obtain all required government and quasi-governmental approvals, consents, and licenses?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
of the Residential Real Estate Brokerage. As between the parties hereto, it will be Franchisee's responsibility to promptly investigate the need for, seek and obtain all government and quasi-governmental approvals, consents and licenses required to commence operations of the Residential Real Estate Brokerage. Franchisor makes no representation or warranty that Franchisee will be able to do so.
- 26.11.2 Without limiting the generality of the requirements of this Section, Franchisee agrees to strictly comply with all applicable laws, rules or regulations of any
nation, state, or other political/governmental subdivision governing the franchised Business.
- 26.11.3 Franchisee undertakes to operate its franchised Business in strict compliance with all applicable laws, rules and regulations of all governmental authorities; comply with all applicable wage, hour and other laws and regulations; prepare and file all necessary tax returns; pay all taxes imposed on Franchisee related to the Residential Real Estate Brokerage; obtain and keep in good standing all necessary licenses, permits and other required forms of governmental approval required for Franchisee to offer and sell the services and products which now or in the future are part of the ENGEL & VÖLKERS System; pay or cause to be paid prior to delinquency all taxes, fines, fees and/or assessments arising out of or in connection with the operation of its franchised Business; and, otherwise be responsible for compliance, at Franchisee's sole expense, with all governmental or quasigovernmental requirements, restrictions, duties and responsibilities.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers does not guarantee that a franchisee will obtain all the necessary government and quasi-governmental approvals, consents, and licenses. Instead, the franchise agreement stipulates that the franchisee is solely responsible for obtaining and maintaining all required licenses, permits, and approvals to operate their Engel & Volkers franchise. This includes compliance with all applicable laws, rules, and regulations at the federal, state, and local levels. Engel & Volkers franchisees must also provide the franchisor with a copy of their real estate broker license annually.
This requirement places the onus on the franchisee to ensure they meet all legal and regulatory obligations for their Engel & Volkers business. Failure to comply with these requirements can result in penalties, fines, or even the inability to operate the franchise. The franchisee is also responsible for any damages or losses incurred by Engel & Volkers due to the franchisee's failure to adhere to these undertakings.
Prospective Engel & Volkers franchisees should carefully investigate the licensing and regulatory requirements in their specific location to fully understand the obligations and costs involved. This includes understanding the requirements for real estate broker licenses, permits, and any other forms of governmental approval necessary to offer and sell services and products related to the Engel & Volkers system. Franchisees must also stay informed about any changes to these regulations and ensure ongoing compliance to avoid potential issues.
While Engel & Volkers does not guarantee the acquisition of these approvals, they do require franchisees to operate in strict compliance with all applicable laws and regulations. This is a common practice in franchising, where franchisees are generally responsible for ensuring their business operations meet all local legal requirements.