Who is responsible for investigating and obtaining all government and quasi-governmental approvals, consents, and licenses required to commence operations of the Residential Real Estate Brokerage for an Engel & Volkers franchise?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
of the Residential Real Estate Brokerage. As between the parties hereto, it will be Franchisee's responsibility to promptly investigate the need for, seek and obtain all government and quasi-governmental approvals, consents and licenses required to commence operations of the Residential Real Estate Brokerage. Franchisor makes no representation or warranty that Franchisee will be able to do so.
- 26.11.2 Without limiting the generality of the requirements of this Section, Franchisee agrees to strictly comply with all applicable laws, rules or regulations of any
nation, state, or other political/governmental subdivision governing the franchised Business.
- 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.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the franchisee is responsible for securing all necessary governmental and quasi-governmental approvals, consents, and licenses required to operate their Residential Real Estate Brokerage. This includes complying with all applicable laws, rules, and regulations, as well as obtaining and maintaining all necessary licenses and permits. The franchisee is also responsible for all costs associated with compliance. Engel & Volkers requires the franchisee to keep these licenses in good standing.
This means that prospective Engel & Volkers franchisees must conduct thorough due diligence to understand the specific licensing and regulatory requirements in their chosen location. They will need to budget for the costs of obtaining and maintaining these licenses, which can vary significantly depending on the jurisdiction. Failure to comply with these requirements can result in penalties, legal issues, and even termination of the franchise agreement.
Engel & Volkers also requires franchisees to notify them in writing within five days of any action, suit, or proceeding, or 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 the franchisee. This ensures that Engel & Volkers is aware of any potential legal or regulatory issues that could impact the franchise system. Furthermore, Engel & Volkers can terminate the franchise agreement if the franchisee fails to obtain or maintain the licenses required for its business operation, including not having at any time a broker of record who holds the broker license required at the Approved Location or violates compliance with laws.
In the franchise industry, it is standard practice for franchisees to be responsible for obtaining and maintaining all necessary licenses and permits to operate their business. This is because franchisees are typically more familiar with the local regulations and requirements in their area. However, franchisors often provide guidance and support to help franchisees navigate the licensing process.