What specific rights must Engel & Volkers lose to trigger termination without cause?
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. Termination by franchisor without cause | §§4.8 | We can terminate upon written notice to you if we lose our rights to use the Engel & Völkers System and Trademarks. |
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, Engel & Volkers can terminate the franchise agreement without cause if they lose their rights to use the Engel & Völkers System and Trademarks. This is a significant consideration for prospective franchisees as it means that the continuation of their franchise is dependent on Engel & Volkers maintaining its rights to its brand and operating system.
This type of termination clause is relatively uncommon in franchising. Typically, franchisors can only terminate a franchise agreement without cause under very specific circumstances, such as the end of the franchise term. The fact that Engel & Volkers can terminate the agreement if they lose their trademark or system rights means that events outside of the franchisee's control could lead to termination.
For a potential Engel & Volkers franchisee, this highlights the importance of understanding the strength and security of the Engel & Volkers brand and trademarks. It would be prudent to investigate any potential risks to the brand's continued use and to seek assurances that Engel & Volkers is taking all necessary steps to protect its intellectual property. Franchisees should also consider what recourse they might have if such a termination occurs, even though it is without cause.