Under what condition will Engel & Volkers not unreasonably withhold consent to a franchisee's sale?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor does not elect to exercise its right of first refusal (as provided in Section 22.5 below), then Franchisor will not unreasonably withhold consent to Franchisee's sale, transfer or assignment of any interest in Franchisee (if Franchisee is a business entity), the
franchise conveyed by this Agreement and Franchisee's right to use the ENGEL & VÖLKERS System, or any interest in any of these, to a third party. Franchisee agrees that it will not be unreasonable for Franchisor to impose, among other requirements, the following conditions to granting consent to Franchisee's proposed sale, assignment or transfer of any of the foregoing:
- 22.3.1 That the proposed assignee (meaning individual or business entity which, after the proposed assignment, will be the franchisee under this Agreement or under any successor/renewal agreement) applies to Franchisor for acceptance as a franchisee and demonstrates to Franchisor's satisfaction that the proposed assignee (and, if it is a business entity, each and every Principal owner and guarantor of the proposed assignee) possesses the skills, qualifications, financial condition, background and history, reputation, economic resources, education, managerial and business experience, moral character, credit rating and ability to assume the duties and obligations under this Agreement or any successor agreement.
Franchisee must pay the costs of any investigation required to be conducted by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers will not unreasonably withhold consent to a franchisee's sale, transfer, or assignment of any interest in the franchise to a third party if Engel & Volkers does not elect to exercise its right of first refusal. However, Engel & Volkers can impose certain conditions to granting consent.
These conditions include ensuring that the proposed assignee applies for acceptance as a franchisee and demonstrates to Engel & Volkers' satisfaction that they possess the necessary skills, qualifications, financial condition, background, history, reputation, economic resources, education, managerial and business experience, moral character, credit rating, and ability to assume the duties and obligations under the franchise agreement or any successor agreement. This applies to both individual assignees and, if the assignee is a business entity, to each principal owner and guarantor of the proposed assignee.
The franchisee is responsible for covering the costs of any investigation that Engel & Volkers deems necessary to conduct in order to assess the proposed assignee's qualifications. This requirement ensures that Engel & Volkers maintains control over who enters their franchise system, safeguarding brand standards and the interests of existing franchisees.