Upon termination or expiration of the Engel & Volkers agreement, what must the franchisee immediately pay?
Engel_Volkers Franchise · 2025 FDDAnswer from 2025 FDD Document
21.1 Cessation of Business Operation: On expiration or termination of this Agreement for any reason, Franchisee will do the following in regard to the franchised Business:
- 21.1.1 immediately pay any amounts due and outstanding under this Agreement, plus any interest owed. If such sums are not paid within ten (10) days of the effective date of expiration or termination, interest will accrue, calculated as provided herein. Notwithstanding the foregoing sentence, Royalty payments on Gross Revenue
from property listings with the Residential Real Estate Brokerage during the Term, that is received, directly or indirectly, by Franchisee or its owners within six (6) months of the date of termination will be due within thirty (30) days of receipt;
Source: Item 22 — CONTRACTS (FDD page 88)
What This Means (2025 FDD)
According to Engel & Volkers' 2025 Franchise Disclosure Document, upon termination or expiration of the Franchise Agreement, the franchisee must immediately pay any outstanding amounts due under the agreement, including any interest owed. If these sums are not paid within ten days of the termination or expiration date, interest will continue to accrue as specified in the agreement.
Notably, royalty payments on gross revenue from property listings with the Residential Real Estate Brokerage during the term, that is received, directly or indirectly, by the franchisee or its owners within six months of the termination date, are due within thirty days of receipt. This means that even after the agreement ends, Engel & Volkers is entitled to royalties from deals that originated during the franchise term.
This immediate payment obligation is a standard clause in franchise agreements to ensure that all financial obligations are settled promptly upon the conclusion of the franchise relationship. Franchisees should be aware of this requirement and plan accordingly to avoid additional interest charges or potential legal action for non-payment. It is also important to understand the ongoing royalty obligations for deals that close shortly after the termination date.