Under the Engel & Volkers Principal's Guarantee, what documents are included in the definition of 'Franchise Documents'?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
| Franchise Agreement dated _ | (the "Franchise Agreement") by and between ENGEL |
|---|---|
| & VÖLKERS AMERICAS, INC. ("Franchisor") and | ("Franchisee"), and |
| for other good and valuable consideration, each of the undersigned hereby, for themselves, their heirs, | |
| successors and assigns, jointly, individually and severally, personally, absolutely and unconditionally: | |
| (1) guarantees to Franchisor and its parent and affiliates and their successors and assigns, for the term of | |
| the Franchise Agreement and thereafter as provided in the Franchise Agreement, that Franchisee shall | |
| punctually pay and perform each and every undertaking, agreement and covenant set forth in the Franchise | |
| Agreement and any documents, agreements, instruments and promissory notes executed pursuant to or in | |
| connection with the Franchise Agreement (collectively, the "Franchise Documents"); and (2) agrees to be | |
| personally bound by, and personally liable for the breach of, each and every provision in the Franchise | |
| Documents applicable to Principals of Franchisee. If more than one person has executed this Guarantee, | |
| the term "the undersigned", as used herein, shall refer to each such person, and the liability of each of the |
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, the term 'Franchise Documents' encompasses the Franchise Agreement itself, along with any associated documents, agreements, instruments, and promissory notes that are executed in connection with the Franchise Agreement. This definition is relevant to the Principal's Guarantee, which requires the franchisee's principals to guarantee the franchisee's obligations under these Franchise Documents.
This means that principals of an Engel & Volkers franchise (those owning 10% or more) are not only guaranteeing the franchisee's adherence to the Franchise Agreement but also to any other related agreements or financial obligations. This could include items such as loan agreements used to finance the franchise, or any amendments or addenda to the Franchise Agreement. The Principal's Guarantee and Assumption of Obligations is attached as Appendix 4 to the Franchise Agreement.
Prospective Engel & Volkers franchisees should carefully review all documents that fall under this definition to fully understand the scope of the Principal's Guarantee. They should also be aware that if any Principals change, the franchisee must notify and provide an updated list of all Principals to Engel & Volkers immediately. This ensures that the guarantee remains valid and enforceable with the current ownership structure of the franchise.