Under what condition are Liquidated damages payable to Engel & Volkers?

According to Engel & Volkers' 2025 Franchise Disclosure Document, liquidated damages are payable if the Franchise Agreement is terminated due to the franchisee's breach. The liquidated damages are typically calculated as the average monthly Royalty fees, National Marketing and Technology Fund contribution, and any other fees due, multiplied by the lesser of 24 months or the number of full calendar months remaining on the term.

If the franchise agreement is terminated before the franchisee begins operating or before Royalty fees and National Marketing and Technology Fund contributions are due, the liquidated damages will be calculated based on what the combined monthly average of Royalty fees, National Marketing and Technology Fund contributions, and any other fees would have been, had the agreement not been terminated, multiplied by 24 months. This calculation will be based on the monthly average of the gross revenue earned by the franchisee (or their owners) in the 12 months before the franchise agreement's effective date from residential real estate brokerage services.

If the franchisee did not previously operate a residential real estate brokerage, the liquidated damages will be equal to the minimum annual Royalty for 24 months, plus any other fees due and payable. This means that Engel & Volkers aims to recoup potential losses resulting from a franchisee's early termination by estimating the fees they would have collected over a set period.