Under what condition 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' 2025 Franchise Disclosure Document, Engel & Volkers can terminate the franchise agreement without cause if they lose their rights to use the Engel & Völkers System and Trademarks. This is done through written notice to the franchisee, as detailed in Section 4.8 of the franchise agreement.
This provision means that if Engel & Volkers, for any reason, loses the legal right to use its established system and trademarks, it can terminate franchise agreements to avoid potential legal issues or brand inconsistencies. This is a significant risk for franchisees, as their business is heavily reliant on the Engel & Völkers brand and system.
While termination without cause is relatively uncommon in franchising, it is important for prospective franchisees to understand the circumstances under which it can occur. Franchisees should carefully consider the stability of the Engel & Volkers brand and trademark rights before investing in a franchise. It would be prudent to inquire about the measures Engel & Volkers takes to protect its trademarks and the potential risks associated with losing those rights.