Does Engel & Volkers require franchisees to conduct an independent investigation of the business?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
26.13 Acknowledgements of Franchisee:
Franchisee represents, warrants and acknowledges the following statements to be true and correct as of the date Franchisee signs this Agreement, and to be binding on Franchisee:
26.13.1 Franchisee has conducted an independent investigation of the business contemplated by this Agreement.
26.13.2 Franchisee represents that, as an inducement to Franchisor's entry into this Agreement, it has made no misrepresentations in obtaining this agreement.
26.13.3 Franchisee is aware of the fact that other present or future franchisees may operate under different forms of agreement(s), and consequently that Franchisor's obligations and rights with respect to its various franchisees may differ materially
in certain circumstances. Any such variances Franchisor determines for other franchisees, do not grant Franchisee any rights or entitle Franchisee to request a similar modification under this Agreement.
26.13.4 No representation or statement has been made by Franchisor or its affiliates (or any of its or their officers, directors, managers, employees, agents or salespersons) regarding Franchisee's anticipated income, earnings and growth of the franchised Business or that of the ENGEL & VÖLKERS System, or the viability of the business opportunity being offered under this Agreement.
26.13.5 Before executing this Agreement, Franchisee has had the opportunity to contact all of Franchisor's existing franchisees.
26.13.6 Franchisee has received from Franchisor a copy of Franchisor's franchise disclosure document, together with a copy of all proposed agreements relating to the sale of the franchise, at least fourteen (14) calendar days before the execution of this Agreement or at least fourteen (14) calendar days before the payment by Franchisee to Franchisor any consideration in connection with the sale or proposed sale of the franchise granted by this Agreement.
26.13.7 Franchisee understands that the franchise relationship is an arms' length, commercial business relationship in which each party acts in its own interest.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees must acknowledge that they have conducted an independent investigation of the business contemplated by the Franchise Agreement. This acknowledgement is part of a broader set of representations and warranties that the franchisee makes to Engel & Volkers when signing the agreement. This indicates that Engel & Volkers expects prospective franchisees to thoroughly research and understand the business opportunity before committing to the franchise.
This requirement is a standard practice in the franchise industry, as it ensures that franchisees are entering the agreement with a clear understanding of the potential risks and rewards. The franchisee is responsible for assessing the market, competition, and financial viability of the Engel & Volkers franchise in their specific location. This independent investigation protects both the franchisee and Engel & Volkers by confirming the franchisee's informed consent and understanding of the business venture.
Furthermore, the FDD states that Engel & Volkers makes no representations or statements regarding the franchisee's anticipated income, earnings, or growth of the franchised business. This reinforces the importance of the franchisee's independent investigation, as they cannot rely on any projections or guarantees from Engel & Volkers regarding financial performance. The franchisee must conduct their own due diligence and analysis to determine the potential profitability of the franchise.
In addition to the independent investigation, the franchisee also acknowledges that they have had the opportunity to contact existing Engel & Volkers franchisees. This provides another avenue for prospective franchisees to gather information and insights about the business from those who are already operating an Engel & Volkers franchise. By contacting current franchisees, prospective franchisees can gain a better understanding of the day-to-day operations, challenges, and opportunities associated with the franchise.