Under what circumstances can an Engel & Volkers franchisee refuse to use systemwide supply contracts?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of your franchise agreement with us we may enter into systemwide supply contracts with service companies, such as banks, mortgage or title companies or insurance companies, which we require you to use, except in cases where you have legitimate commercial or financial reasons for refusing to do so. These systemwide supply contracts will enable you to offer additional services to your clients, for example, mortgage loans and homeowner's insurance. Provision of these kinds of services may require you to obtain additional franchises and to comply with laws regulating these industries. Consult with your lawyer to learn about specific laws applicable to your business.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS, AND AFFILIATES (FDD pages 8–15)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, franchisees are generally required to use systemwide supply contracts that the company may establish with service providers like banks, mortgage, title, or insurance companies. These contracts are intended to enable franchisees to offer additional services, such as mortgage loans and homeowner's insurance, to their clients.
However, an Engel & Volkers franchisee can refuse to use these systemwide supply contracts if they have legitimate commercial or financial reasons for doing so. This exception acknowledges that franchisees may have existing relationships or alternative arrangements that are more beneficial or suitable for their specific business needs.
It is important to note that offering these additional services may require the franchisee to obtain additional licenses and comply with laws regulating these industries. Therefore, Engel & Volkers advises franchisees to consult with their lawyers to understand the specific laws applicable to their business.