Can Engel & Volkers waive or reduce the scope of any covenant in Section 16 of the franchise agreement?

According to Engel & Volkers' 2025 Franchise Disclosure Document, Engel & Volkers has the right to waive or reduce the scope of any covenant in Section 16 of the franchise agreement. Engel & Volkers, in its sole discretion, can waive in whole or in part or otherwise reduce the scope of any covenant set forth in Section 16 or any portion of the agreement. This waiver is effective upon Engel & Volkers giving notice to the franchisee, and the franchisee's consent is not required.

This provision provides Engel & Volkers with considerable flexibility in managing the franchise relationship. It allows Engel & Volkers to adjust the restrictive covenants based on changing market conditions, individual franchisee circumstances, or other strategic considerations. While this flexibility can be beneficial in certain situations, it also introduces an element of uncertainty for the franchisee. The franchisee must be prepared for the possibility that the scope of certain covenants could be altered during the term of the agreement.

The franchisee expressly agrees to be bound by any lesser covenants subsumed within the terms of Section 16 as if the resulting covenants were separately stated in and made a part of the agreement. This means that if Engel & Volkers reduces the scope of a covenant, the franchisee is immediately bound by the modified covenant.

It is important for a prospective Engel & Volkers franchisee to carefully consider the implications of this provision. While Engel & Volkers may exercise this right to waive or reduce the scope of covenants in a way that benefits the franchisee, there is also the potential for changes that could be detrimental. Franchisees should seek clarification from Engel & Volkers regarding the circumstances under which such waivers or reductions would be implemented and the potential impact on their business operations.