Under what conditions will the Engel & Volkers Franchise Agreement automatically terminate without notice?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 20.2 Automatic Termination Without Notice.
Franchisee will be in default under this Agreement, and all rights granted in this Agreement will immediately and automatically terminate and revert to Franchisor without notice to Franchisee, if: Franchisee, the franchised Business or any affiliate or Guarantor thereof is adjudicated as bankrupt or insolvent; all or a substantial portion of the assets of the franchised Business are assigned to or for the benefit of any creditor; a petition in bankruptcy is filed by or against Franchisee, the franchised Business and/or any affiliate or Guarantor thereof and is not immediately contested and thereafter dismissed or vacated within sixty (60) days from filing; Franchisee, the franchised Business and any affiliate or Guarantor thereof cause, permit or acquiesce in an order for relief under the U.S.
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the Franchise Agreement will automatically terminate without notice if the franchisee, the franchised business, or any affiliate or guarantor is adjudicated as bankrupt or insolvent. This also applies if all or a substantial portion of the assets of the franchised business are assigned to or for the benefit of any creditor.
Additionally, automatic termination occurs if a petition in bankruptcy is filed by or against the franchisee, the franchised business, and/or any affiliate or guarantor, and it is not immediately contested and subsequently dismissed or vacated within sixty (60) days from filing. The franchisee will be considered in default, and all rights granted in the agreement will immediately terminate and revert to Engel & Volkers without notice under these conditions.
This clause protects Engel & Volkers from financial instability or actions that could jeopardize the brand's reputation and financial interests. Franchisees should be aware of these conditions and ensure they maintain sound financial practices to avoid automatic termination of their franchise agreement. It is important to note that Engel & Volkers does not allow the franchisee to terminate or cancel the agreement.