What is the royalty rate for Engel & Volkers franchisees in Tier 1, with annual gross revenues from $0 to $1,000,000?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
y Gross Revenues received from any such transactions.
Notwithstanding the decreasing Royalty rate set forth in the Royalty Schedule above, if Franchisee does not report all Gross Revenues pursuant to Section 13.1 or pay all fees on it when due as set forth in this Agreement, the Royalty rate on all of Franchisee's Gross Revenues will be six percent (6%). Furthermore, all Gross Revenues on which Royalties and National Marketing and Technology Fund Fees (as defined below) are not paid when due, shall be subject to a six percent (6%) Royalty rate for the remainder of the Term of the Agreement.
For the avoidance of doubt and by way of example only, if Franchisee's Gross Revenues in a calendar year were $2,500,000 and Franchisee paid all fees payable on the Gross Revenues when due, Franchisee would pay 6% Royalty for Gross
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees pay ongoing royalties based on their gross revenues. The royalty rate is determined by a tiered schedule, where the rate applies only to the increment of gross revenue within each tier. For example, if a franchisee's gross revenues in a calendar year were $2,500,000 and all fees were paid on time, the franchisee would pay 6% royalty for gross revenues up to $1,000,000.
For Engel & Volkers franchisees in Tier 1, with annual gross revenues from $0 to $1,000,000, the royalty rate is 6%. This means that for every dollar of gross revenue earned up to $1,000,000, the franchisee will pay $0.06 to Engel & Volkers as a royalty.
It's important to note that if a franchisee fails to report all gross revenues or pay all fees when due, the royalty rate on all of the franchisee's gross revenues will be 6%. Furthermore, all gross revenues on which royalties and National Marketing and Technology Fund Fees are not paid when due, shall be subject to a 6% royalty rate for the remainder of the term of the agreement.