Can Engel & Volkers selectively enforce provisions of the franchise agreement?

According to Engel & Volkers's 2025 Franchise Disclosure Document, the franchise agreement contains provisions that address the rights of third-party beneficiaries. Specifically, the Engel & Völkers Group, its Parent, E&V Marken, Grund Genug Verlag, and their affiliates are explicitly identified as third-party beneficiaries of the agreement. This designation grants these entities the right to enforce all terms and provisions of the agreement if Engel & Volkers, the franchisor, fails or refuses to do so. This clause ensures that certain related parties have the legal standing to uphold the agreement's conditions, even if the franchisor does not take action.

This aspect of the franchise agreement has significant implications for prospective franchisees. It means that not only Engel & Volkers but also its parent company and other affiliated entities have the power to ensure compliance with the agreement. This could provide an additional layer of oversight and enforcement, potentially benefiting franchisees by ensuring that Engel & Volkers adheres to its obligations. However, it also means that franchisees could face enforcement actions from multiple parties, increasing the potential for disputes or legal challenges.

Typically, franchise agreements primarily grant enforcement rights to the franchisor. The inclusion of third-party beneficiaries with enforcement rights is less common and adds complexity to the contractual relationship. Franchisees should carefully consider this provision and understand the potential implications of dealing with multiple enforcers of the agreement. It would be prudent for prospective franchisees to seek legal counsel to fully understand their rights and obligations under this arrangement.

In summary, while Engel & Volkers retains the primary responsibility for enforcing the franchise agreement, the presence of third-party beneficiaries with enforcement rights means that other entities can also step in to ensure compliance. This structure could offer both benefits and risks to franchisees, and a thorough understanding of these provisions is essential before entering into the franchise agreement.