Is the Engel & Volkers recipient required to defend the Franchisor against claims?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
in monetary damages if Recipient discloses or misuses any Confidential Information. Accordingly, in the event of a breach of this Agreement by Recipient, Recipient consents to entry of interim relief, including, without limitation, the entry of a temporary restraining order, preliminary injunction, permanent injunction, writ of attachment, appointment of a receiver, and any other equitable relief which the court deems necessary in order to prevent irreparable injury, all without the requirement
that bond be posted. Recipient agrees that the award of equitable remedies to Franchisor in the event of such breach is reasonable and necessary for the protection of the business and goodwill of Franchisor.
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- Recipient hereby agrees to indemnify, hold harmless and, upon request, defend Franchisor, its affiliates, and their respective members, owners, shareholders, directors, officers, employees and agents (the "Indemnified Parties"), from and against all suits, proceedings, assessments, losses, claims, demands or actions of any nature or kind whatsoever ("Claims"), directly or indirectly arising out of, or in any manner whatsoever associated or connected with the failure of Recipient to observe and perform his or her duties and obligations under this Agreement, and against any and all damages, costs, expenses and fees (including, without limitation, reasonable legal expenses and fees), losses, fines or penalties incurred by or on behalf of any of the Indemnified Parties in the investigation or defense of any and all Claims. Recipient further agrees to pay for Franchisor's court costs and reasonable attorney's fees in enforcing this Agreement.
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- All terms not otherwise defined in this Agreement shall have the same meanings as the defined terms in the Franchise Agreement.
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- Recipient expressly agrees that it may conclusively be presumed in any legal action that any violation of the terms of these covenants not to compete was accomplished by and through Recipient's unlawful utilization of Franchisor's Confidential Information.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the recipient, under certain circumstances, is required to defend the Franchisor against claims. Specifically, the Recipient agrees to indemnify, hold harmless, and upon request, defend Engel & Volkers, its affiliates, and their respective members, owners, shareholders, directors, officers, employees, and agents (the "Indemnified Parties") from and against all suits, proceedings, assessments, losses, claims, demands or actions of any nature or kind whatsoever ("Claims"), directly or indirectly arising out of, or in any manner whatsoever associated or connected with the failure of Recipient to observe and perform his or her duties and obligations under this Agreement, and against any and all damages, costs, expenses and fees (including, without limitation, reasonable legal expenses and fees), losses, fines or penalties incurred by or on behalf of any of the Indemnified Parties in the investigation or defense of any and all Claims.
This obligation is tied to the recipient's failure to perform their duties under the agreement. This means that if a claim arises due to the recipient's actions or inactions that violate the franchise agreement, they are responsible for defending Engel & Volkers against such claims. This could include covering legal expenses, damages, and any other costs associated with the claim.
Furthermore, the FDD states that should it ever be asserted that Engel & Volkers is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors in any private or government investigation, action, proceeding, arbitration or other setting, Franchisee irrevocably agrees to assist Engel & Volkers in defending said allegation, including (if necessary) appearing at any venue requested by Engel & Volkers to testify on Franchisor's behalf (and, as may be necessary, submitting itself to depositions, other appearances and/or preparing affidavits dismissive of any allegation that Engel & Volkers is the employer, joint employer or co-employer of Franchisee or any of Franchisee's employees or contractors).
This requirement to defend Engel & Volkers is a significant responsibility for the franchisee. It highlights the importance of adhering to the franchise agreement and operating the business in compliance with all applicable laws and regulations. Prospective franchisees should carefully consider this obligation and ensure they have adequate resources to meet these potential defense and indemnity requirements.