Under what circumstances must an Engel & Volkers franchisee indemnify the franchisor?

According to Engel & Volkers's 2025 Franchise Disclosure Document, franchisees must indemnify Engel & Volkers and other specified parties against all costs and expenses, including attorney's fees. This indemnification obligation arises from claims made by third parties that result from the franchisee's actions or omissions. This payment is due to Engel & Volkers, their affiliates, and their respective directors, officers, employees, or agents upon demand.

In practical terms, this means that if a third party (such as a customer, vendor, or another business) brings a claim against Engel & Volkers due to something the franchisee did or failed to do, the franchisee is responsible for covering all associated costs. These costs can include legal fees, settlement amounts, and any other expenses incurred by Engel & Volkers in defending against or resolving the claim. The obligation to indemnify protects Engel & Volkers from liabilities caused by the franchisee's operational conduct.

This type of indemnification clause is standard in franchise agreements. It is important for prospective Engel & Volkers franchisees to understand the scope of this obligation and to ensure they have adequate insurance coverage to protect themselves against potential claims. Franchisees should also implement sound business practices and adhere to all applicable laws and regulations to minimize the risk of third-party claims. Understanding this obligation is crucial for managing the financial risks associated with operating an Engel & Volkers franchise.