When renewing the Engel & Volkers franchise agreement, can the franchisee be asked to sign a contract with materially different terms and conditions than their original contract?

According to the 2025 Engel & Volkers Franchise Disclosure Document, when renewing the franchise agreement, Engel & Volkers may require the franchisee to sign a contract with materially different terms and conditions than those in the original agreement. To renew the franchise agreement, the franchisee must serve written notice to Engel & Volkers at least six months before the expiration of the current term, comply with all provisions of the Franchise Agreement and other agreements with Engel & Volkers, sign the then-current form of the Franchise Agreement, sign a general release, and pay a renewal fee. The initial franchise term is 10 years, with one renewal period of 10 years available.

This requirement to sign a potentially different agreement upon renewal carries significant implications for prospective franchisees. It means that the terms under which they initially invested in the franchise could change substantially after the first 10-year term. These changes could affect various aspects of the business, including fees, operational requirements, and territorial rights. Franchisees need to carefully review the renewal agreement to understand any new obligations or limitations.

It is important for potential Engel & Volkers franchisees to seek legal counsel to fully understand the implications of this renewal clause. They should also inquire about the types of changes that have been implemented in past renewal agreements to better anticipate potential future terms. Franchisees in North Dakota do not have to sign a general release upon renewal of the Franchise Agreement.