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Engel & Völkers Franchise Cost & Fees

Date of Incorporation: 1977
Franchising Since: 1997
U.S. Headquarters: New York, New York
Country of Origin: Germany

Business Description: The franchisor is a majority owned subsidiary of Engel & Volkers U.S. Holding GmbH, a German limited-liability company. In 2007, the ownership of U.S. Holding GmbH was acquired by Engel & Volkers International GmbH, a German limited liability company. The sole business of the franchisor is the granting of master licenses and direct licenses in the United States and the providing of services to licensees regarding the residential property.

Franchise Offer: The franchise offered is the opportunity to open and operate Engel & Volkers Property Shops for the marketing of residential property regarding the residential property sector consisting of (i) the opportunity to open and operate Engel & Volkers Residential Real Estate Brokerages for the marketing of residential property under the Engel & Volkers trade name, Trademarks and System of operating procedures, including the utilization of a worldwide client platform, and (ii) for master licensees, the right to grant sublicenses to third parties to own and operate Residential Real Estate Brokerages using the Engel & Volkers System.

Financial Assistance: The franchisor does not offer any direct or indirect financing, nor do they guarantee any note, lease or obligation.

Training and Assistance: The franchisor will conduct training courses, seminars or conferences for franchisees at a location it selects in the United States at its discretion. The franchisee must pay for any fees and all the costs of transportation, lodging, meals and other expenses of the attendees. Attendance at these courses is mandatory. The franchisor will conduct training courses for the franchisee’s sales agents and employees at either the Engel & Volkers facility in the United States as determined in its sole discretion. The franchisor reserves the right to offer additional, ongoing and supplemental training sessions at times and locations it designates. The franchisor may make certain of these training sessions mandatory for franchisees, and it reserves the right to charge a fee for attendance at this training.

Territory: Generally, the franchisee will receive the right to operate an Engel & Völkers Residential Real Estate Brokerage at a specific location as specified in the License Agreement. The franchisee will have exclusivity with regard to the Brokerage in a specific area called the “Protected Area,” which will be an area defined by US postal codes. By “exclusivity” the franchisor means that it will not open or grant to anyone else the right to open another Brokerage in the Protected Area during the term if the License Agreement.

Term of Agreement and Renewal: The term of the franchise agreement is 10 years with an option to renew for another 10 years, if requirements are met.

Obligations and Restrictions: The franchisor neither requires nor makes any recommendations that the franchisee personally supervises or participates in the actual operation of the licensed business. If the franchisee does not personally participate, they must employ a brokerage manager. The License Agreement strictly defines the real estate brokerage services the franchisee may provide under the Engel & Volkers name. These defined services are more limited than the scope of activities permitted under most state real estate licensing laws.

Estimated Number of Units: 700

Investment Tables:
Initial Investment for Conversion Residential Real Estate Brokerage
Name of Fee Low High
Admission Fee Minimum of $35,000
Training Fees $2,050 $10,232
Training Fee for Brokerage Manager $0 $4,998
Travel and Accommodation Expenses While Training $5,000 $15,000
License and Trade Requirements Varies
Furniture, Equipment and Signage $15,000 $120,000
MLS Research/Set Up Fee Varies
Advertising $3,500 $15,000
Insurance $5,000 $8,000
Grand Opening $5,000 $25,000
Printing and Promotional Supplies $2,500 $7,5000
Additional Funds (3 months) $20,000 $60,000
ESTIMATED TOTAL $93,050 $300,730
Initial Investment for Start Up Real Estate Brokerage
Name of Fee Low High
Admission Fee Minimum of $35,000
Training Fees $2,050 $10,232
Training Fee for Brokerage Manager $0 $4,998
Travel and Accommodation Expenses While Training $5,000 $15,000
Leasehold Improvements Varies
License and Trade Requirements Varies
Furniture, Equipment and Signage $50,000 $120,000
Supplies $5,000 $15,000
MLS Research/Set Up Fee Varies
Computer and Network $15,000 $30,000
Advertising $3,500 $15,000
Insurance $5,000 $8,000
Grand Opening $5,000 $25,000
Printing and Promotional Supplies $2,500 $7,500
Additional Funds (3 months) $50,000 $150,000
ESTIMATED TOTAL $178,050 $435,730
Other Fees
Type of Fee Amount
Ongoing Royalties 6% of Net Commissions or $1,000 per month, whichever is greater.
Internal Commissions (Referral Fee) As negotiated between the franchisee and the referring licensee.
National Marketing Fund Contributions 2% of Gross Revenues with a minimum of $1,250 per month.
System Training Fees $4,998 per person.
Sales Agent Training Fees $4388 per person.
Employee Training Fees $298 - $438 per person.
Additional Training At then current training fees.
Conference Fee Varies.
Global Guide advertisements 2 property advertisements at $1,990 each per year.
Additional IT Services Fees According to then current Technology Price List.
Transfer Fee $2,500 administrative fee.
Purchases of marketing articles Varies.
Interest 1.5% per month or the highest rate permitted by applicable law on any balance unpaid by more than 10 days.
Attorneys' Fees Varies.
Indemnification The franchisee must indemnify the franchisor and other parties against all costs and expenses, including attorney's fees, arising out of claims by third parties as a result of his/her actions or omissions.
Tax Indemnity The franchisee must pay the franchisor the amount of any state or local sales, use, gross receipts or similar tax that the franchisor may be required to pay on payments which he/she makes to the franchisor.
Inspection and Audit Costs The franchisee must reimburse the franchisor for the cost of inspection or audit, including the charges of its employees, attorneys and accountants, and travel expenses.

The above information has been taken from the FDD of Engel & Völkers. Year of FDD: 2016

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