Under what circumstances does the restriction of liability NOT apply to Engel & Volkers?

According to the 2025 Engel & Volkers Franchise Disclosure Document, the indemnity a franchisee provides does not extend to liability associated with Engel & Volkers' or other indemnified parties' gross negligence, willful misconduct, or criminal acts. However, this exclusion does not apply if joint liability is involved, in which case the indemnification will cover any comparative or contributory negligence attributed to the franchisee. This means that while Engel & Volkers seeks to be indemnified by its franchisees in many situations, there are specific limits to this protection.

In practical terms, this means that if Engel & Volkers is found to be grossly negligent or engages in willful misconduct or criminal acts, the franchisee is not required to indemnify them for resulting liabilities, unless the franchisee's own negligence also contributed to the issue. This clause aims to protect franchisees from being held responsible for serious misconduct directly attributable to Engel & Volkers. However, if the franchisee is even partially at fault, they may still be required to provide indemnification to the extent of their contribution to the liability.

This type of clause is fairly standard in franchise agreements, as franchisors often seek to protect themselves from liabilities arising from the franchisee's operation of the business. However, it is also typical to see exceptions for the franchisor's own misconduct, as this excerpt details. Prospective Engel & Volkers franchisees should carefully review this section of the Franchise Agreement with legal counsel to fully understand the scope of their indemnification obligations and the circumstances under which they may or may not be liable for Engel & Volkers' actions.