Is there an exception to Engel & Volkers' ability to terminate the franchise agreement with 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. |
| f. Termination by franchisor with cause | §§20.2 – 20.4, | We can only terminate if you default, except 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 typically only terminate a franchise agreement if the franchisee defaults. However, there is an exception: Engel & Volkers can terminate the franchise agreement if they lose their rights to use the Engel & Völkers System and Trademarks, even if the franchisee is not in default.
This means that an Engel & Volkers franchisee's business could be terminated, even if they are in full compliance with the franchise agreement, if Engel & Volkers loses its rights to the brand's system and trademarks. This is a significant risk for franchisees, as their investment and business operations are dependent on Engel & Volkers maintaining its brand rights.
It is important for prospective franchisees to understand this termination condition and to assess the potential risk associated with Engel & Volkers' ability to maintain its rights to the Engel & Völkers System and Trademarks. Further due diligence into the brand's history and legal standing may be warranted to evaluate this risk.