What is the royalty rate for Engel & Volkers franchisees in Tier 7, with annual gross revenues of $30,000,000.01 and above?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
oyalty Schedule, the amount of Gross Revenues achieved by Franchisee is multiplied by the royalty rate of that tier to calculate the Royalty rate for that Gross Revenue reported by Franchisee.
The Royalty rate reflected for each tier in the Royalty Schedule applies only to the increment of Franchisee's Gross Revenue listed for such tier. Achieving sufficient Gross Revenue for some Gross Revenue to qualify into a higher tier in the Royalty Schedule will not reduce Royalties owed and payable by Franchisee to Franch
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the royalty rate for franchisees in Tier 7 with annual gross revenues of $30,000,000.01 and above is 3.75%. This royalty is calculated on a calendar year basis. Engel & Volkers franchisees pay this ongoing royalty in return for the use of the Engel & Volkers system and the rights acquired under the franchise agreement.
The royalty rate applies only to the increment of gross revenue listed for 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, 5.5% royalty for the next $1,000,000 of gross revenues, and 5% royalty for the remaining $500,000 of gross revenues. The Engel & Volkers FDD provides this example for illustrative purposes only.
It's important to note that Engel & Volkers franchisees must report all gross revenues and pay all fees when due. Failure to do so will result in a higher royalty rate of 6% on all gross revenues. This condition underscores the importance of accurate financial reporting and timely payments to Engel & Volkers to maintain the lower royalty rates associated with higher revenue tiers.