Does Engel & Volkers have the right to apply different policies to different franchisees?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may adapt the ENGEL & VÖLKERS System to the peculiarities of a particular market area or its circumstances, business potential, population, existing business practices, any other condition which Franchisor considers important to the successful operation of Franchisee's business, or due to other events or other nonarbitrary distinctions, and whether or not they arise to the level of a force majeure event and whether or not they are foreseeable may Franchisee understands and agrees that adaptations and modifications to the ENGEL & VÖLKERS System may obligate Franchisee to invest additional capital or incur higher operating costs.
Franchisor shall be entitled to set requirements and restrictions on advertising, promotion and other activities that it determines, in its sole discretion, negatively impacts the business of one or more other franchisees or that is specifically targeted or directed towards the protected areas of one or more other franchisees. Such requirements and restrictions are intended to balance the ability of franchisees to freely compete in the marketplace and the right of a franchisee to operate within its protected area without undue interference from other franchisees, and Franchisor shall have full discretion in its determination of such balance. Franchisee agrees to comply with all such requirements and restrictions.
Franchisee acknowledges and agrees that, in addition to modifications of the ENGEL & VÖLKERS System, Franchisor may incorporate into the ENGEL & VÖLKERS System products, services or programs which Franchisor either develops or otherwise obtains rights to, which are offered and sold under names, trademarks and/or service marks other than the Trademarks and which the franchised Residential Real Estate Brokerage operated hereunder, along with other Residential Real Estate Brokerages, will be required to offer and sell (collectively, "Co-Branding"). This Co-Branding may involve changes to the Trademarks, and may require Franchisee to modify the building and premises of its Residential Real Estate Brokerage and the furnishing, fixtures, equipment, signs and trade dress at such brokerage. If Franchisee receives written notice of Franchisor's institution of Co-Branding, Franchisee must implement the Co-Branding in its Residential Real Estate Brokerage. There is no limit on Franchisor's rights to require Franchisee to make changes for Co-Branding in such circumstances.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers has the right to adapt its system to the peculiarities of a particular market area or its circumstances, business potential, population, existing business practices, or any other condition which Engel & Volkers considers important to the successful operation of the franchisee's business. These adaptations and modifications may obligate the franchisee to invest additional capital or incur higher operating costs. This means that Engel & Volkers can tailor its franchise system to fit specific local conditions, potentially leading to variations in required investments and operational expenses for different franchisees.
Engel & Volkers is also entitled to set requirements and restrictions on advertising, promotion and other activities that it determines, in its sole discretion, negatively impacts the business of one or more other franchisees or that is specifically targeted or directed towards the protected areas of one or more other franchisees. These requirements and restrictions are intended to balance the ability of franchisees to freely compete in the marketplace and the right of a franchisee to operate within its protected area without undue interference from other franchisees, and Engel & Volkers has full discretion in its determination of such balance. Franchisees must comply with all such requirements and restrictions. This indicates that Engel & Volkers can impose different advertising and promotional rules on franchisees to manage competition and protect individual territories.
Engel & Volkers may incorporate into the Engel & Volkers System products, services or programs which Engel & Volkers either develops or otherwise obtains rights to, which are offered and sold under names, trademarks and/or service marks other than the Trademarks and which the franchised Residential Real Estate Brokerage operated hereunder, along with other Residential Real Estate Brokerages, will be required to offer and sell (collectively, "Co-Branding"). This Co-Branding may involve changes to the Trademarks, and may require Franchisee to modify the building and premises of its Residential Real Estate Brokerage and the furnishing, fixtures, equipment, signs and trade dress at such brokerage. If Franchisee receives written notice of Engel & Volkers' institution of Co-Branding, Franchisee must implement the Co-Branding in its Residential Real Estate Brokerage. There is no limit on Engel & Volkers' rights to require Franchisee to make changes for Co-Branding in such circumstances. This means that Engel & Volkers can mandate the adoption of co-branded products and services, potentially requiring franchisees to modify their business premises and operations.