Who is responsible for the expense of complying with all governmental requirements related to the Engel & Volkers franchise?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
26.11.3 Franchisee undertakes to operate its franchised Business in strict compliance with all applicable laws, rules and regulations of all governmental authorities; comply with all applicable wage, hour and other laws and regulations; prepare and file all necessary tax returns; pay all taxes imposed on Franchisee related to the Residential Real Estate Brokerage; obtain and keep in good standing all necessary licenses, permits and other required forms of governmental approval required for Franchisee to offer and sell the services and products which now or in the future are part of the ENGEL & VÖLKERS System; pay or cause to be paid prior to delinquency all taxes, fines, fees and/or assessments arising out of or in connection with the operation of its franchised Business; and, otherwise be responsible for compliance, at Franchisee's sole expense, with all governmental or quasigovernmental requirements, restrictions, duties and responsibilities.
26.11.4 Franchisee shall notify Franchisor in writing within five (5) days of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, which may adversely affect the operation or financial condition of Franchisee.
26.11.5 Franchisee and its Principals understand the requirements of, and will abide by, all United States government economic sanctions requirements throughout the Term.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchisee is solely responsible for the expense of complying with all governmental or quasi-governmental requirements, restrictions, duties, and responsibilities related to operating their franchised business. This includes adhering to all applicable laws, rules, and regulations from governmental authorities, complying with wage and hour laws, filing necessary tax returns, paying taxes related to the real estate brokerage, and obtaining and maintaining all necessary licenses and permits.
This means that prospective Engel & Volkers franchisees must budget for and handle all costs associated with regulatory compliance. These costs can include license fees, permit costs, legal and accounting fees for ensuring compliance, and any potential fines or assessments. Franchisees need to be proactive in understanding and meeting all local, state, and federal requirements to avoid penalties and maintain good standing.
Engel & Volkers also requires franchisees to notify them in writing within five days of any action, suit, proceeding, order, writ, injunction, award, or decree from any court, agency, or governmental body that could negatively impact the franchisee's operations or financial condition. This ensures that Engel & Volkers is aware of any potential legal or regulatory issues that could affect the brand. Furthermore, franchisees must adhere to all United States government economic sanctions requirements, and they must warrant that they and their principals are not on the U.S. Treasury's Office of Foreign Assets Control (OFAC) list or subject to trade restrictions under United States law.