Under what circumstances does Engel & Volkers require spousal consent for a guarantor?

According to Engel & Volkers' 2025 Franchise Disclosure Document, if the franchisee is a business entity, the principal owners, defined as those owning 10% or more of the franchisee, must sign a Principal's Guarantee and Assumption of Obligations. Engel & Volkers may also require the principal's spouse to sign the Guarantee form if the principal resides in a community property state or for other reasons determined by Engel & Volkers.

This requirement ensures that Engel & Volkers has recourse to the personal assets of the franchisee's owners and potentially their spouses in the event of a default or breach of the franchise agreement. Community property states generally consider assets acquired during the marriage to be jointly owned, so requiring spousal consent can be a way for Engel & Volkers to ensure that these assets are also available to satisfy any debts or obligations of the franchisee.

For a prospective Engel & Volkers franchisee, this means that if you own 10% or more of the franchise through a business entity, you and potentially your spouse will be required to sign a personal guarantee. This is a significant obligation, as it puts your personal assets at risk. It is important to understand the implications of signing a personal guarantee and to seek legal advice before doing so. Franchisees should clarify with Engel & Volkers the specific reasons why spousal consent might be required in their particular situation.