What is the renewal fee for an Engel & Volkers franchise agreement?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.2.5 Franchisee shall have paid to Franchisor a renewal fee in an amount equal to fifty percent (50%) of the Initial Franchise Fee described in Section 14.1 hereof.
Initial Franchise Fee: Franchisee will pay Franchisor a non-refundable Initial Franchise Fee of $35,000.00 by cashier's check or bank certified check, or by such other means as required by Franchisor at the time Franchisee's Residential Real Estate Brokerage opens for business (hereinafter called "Initial Franchise Fee").
If Franchisee is renewing its Franchise Agreement, the parties agree that Section 19.2 shall be amended to provide that Franchisee shall only have additional renewal term(s) of () years each, and additional renewal term(s) of () years each, and that the renewal fee shall be $
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, the renewal fee is 50% of the initial franchise fee. The initial franchise fee is $35,000 for the first location. Therefore, the renewal fee would be $17,500. This fee must be paid to Engel & Volkers when renewing the franchise agreement.
It is important to note that Exhibit J of the FDD provides a Renewal Rider that may amend Section 19.2 regarding renewal terms and fees. This rider suggests that the renewal fee could potentially be a different amount than 50% of the initial franchise fee, as it includes a blank space for a specific dollar amount.
Prospective franchisees should carefully review Exhibit J and discuss the specific renewal terms and fees with Engel & Volkers to understand the potential costs associated with renewing their franchise agreement. Understanding the renewal terms is crucial for long-term financial planning and ensuring the continued operation of the Engel & Volkers franchise.