Under what circumstances can Engel & Volkers terminate the Franchise Agreement without 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. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 63–71)
What This Means (2025 FDD)
According to Engel & Volkers's 2025 Franchise Disclosure Document, Engel & Völkers can terminate the Franchise Agreement without cause if they lose their rights to use the Engel & Völkers System and Trademarks. This is according to section 4.8 of the franchise agreement.
This means that if Engel & Volkers, for any reason, loses the legal right to use its established system and trademarks, it can terminate the franchise agreements of its franchisees. This could be due to legal challenges, failure to renew trademarks, or other unforeseen circumstances.
For a prospective franchisee, this highlights a potential risk. While franchise agreements typically outline numerous 'with cause' termination scenarios related to franchisee misconduct or failure to meet standards, the 'without cause' termination clause related to the franchisor's trademark rights is less common. It is important for a prospective Engel & Volkers franchisee to understand the stability and security of the Engel & Volkers System and Trademarks, as their franchise agreement is contingent upon Engel & Volkers maintaining these rights.