Does Engel & Volkers recommend that franchisees personally participate in the actual operation of their franchised business?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 15: OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS]
Item 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS
We neither require nor make any recommendations that you personally supervise or participate in the actual operation of your franchised business.
If you do not personally participate, you must employ a brokerage manager. The brokerage manager must be a licensed real estate broker in your state able to supervise the franchised business on a full-time basis. Except for the licensing requirement, we do not limit who you may hire as a broker manager. The brokerage manager must continuously exert his or her best efforts during normal business hours to promote and manage the franchised business. That person must not engage in any other business or activity that requires his or her active participation during normal business hours or that may conflict with your obligations under the Franchise Agreement. We do not require your brokerage manger to have an equity interest in your franchised business; however, your brokerage manager must agree in writing to preserve the confidentiality of any confidential information to which they have access. If an individual Franchisee or the Principals of a business entity Franchisee will not be active in the Residential Real Estate Brokerage, then your brokerage manager must attend the required training courses. The person or persons attending the training must complete the training, but there is no test that they must successfully pass.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 61–62)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers does not require nor recommend that franchisees personally supervise or participate in the actual operation of their franchised business. However, if the franchisee chooses not to participate personally, they must employ a brokerage manager.
The brokerage manager must be a licensed real estate broker in the state where the franchise is located and must be able to supervise the franchised business on a full-time basis. Engel & Volkers does not limit who the franchisee may hire as a broker manager, except for the licensing requirement. The brokerage manager is expected to exert their best efforts during normal business hours to manage and promote the franchised business and cannot engage in other conflicting business activities during those hours.
The brokerage manager is not required to have an equity interest in the Engel & Volkers franchise, but they must agree in writing to maintain the confidentiality of any confidential information they access. Additionally, if the franchisee or the principals of a business entity franchisee will not be active in the Residential Real Estate Brokerage, then the brokerage manager must attend the required training courses. The person attending the training must complete the training.