What specific aspects of the Engel & Volkers Franchise Agreement are potentially subject to state law?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| a. Length of the franchise | §19.1 | 10 years |
| term | ||
| b. Renewal or extension of | §§19.2, 19.3 | 1 period of 10 years |
| the term | ||
| c. Requirements for franchisee to renew or extend | §§19.2, 19.3 | Serve written notice on us at least 6 mopnths before expiration of current term, comply with all provisions of Franchise Agreement and other agreements with us, sign the then current form of Franchise Agreement, sign a general release and pay a renewal fee. You may be asked to sign a contract with materially different terms and conditions than your original contract. |
| d. Termination by | §20.1 | You may not terminate or cancel the Franchise |
| franchisee | Agreement. This provision is subject to state law. | |
| e. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 63–71)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, several aspects of the franchise agreement may be subject to state law. Specifically, the provision preventing a franchisee from terminating or canceling the Franchise Agreement is subject to state law. Additionally, the choice of law provision, which generally dictates that New York law applies, may also be subject to state law. This means that depending on the franchisee's location, state laws could override certain terms in the agreement.
For prospective Engel & Volkers franchisees, this means that the enforceability and interpretation of certain clauses within the Franchise Agreement can vary significantly depending on the state in which they operate their franchise. For instance, a state's franchise law might grant franchisees broader termination rights than what is initially outlined in the agreement. Similarly, state laws could impact which legal framework governs disputes.
Furthermore, the FDD includes state-specific addenda for Hawaii, Illinois, Maryland, Minnesota, New York, North Dakota, Virginia, and Washington, indicating that these states have specific regulations that modify the standard franchise agreement. For example, in North Dakota, waivers of trial by jury and exemplary/punitive damages are prohibited, superseding the standard agreement's terms. California also has specific laws regarding termination, transfer, or non-renewal of a franchise, where the law will control if the franchise agreement is inconsistent with it.
Given these state-specific variations, it is crucial for potential Engel & Volkers franchisees to carefully review the addenda applicable to their state and consult with a legal professional to understand their rights and obligations under both the franchise agreement and relevant state laws. This due diligence can help ensure they are fully aware of the legal landscape governing their franchise operation and can avoid potential disputes or misunderstandings in the future.