Engel & Völkers
Date of Incorporation: 1977
Franchising Since: 1998
U.S Headquarters: New York, New York
Country of Origin: Germany
Description: The franchisor is a majority owned subsidiary of Engel & Volkers U.S. Holding GmbH, a German limited-liability company which was organized in December 2005. On December 31st 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 in the United States and the providing of services to master 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 under the Engel & Volkers trade name, trademarks and system of operating procedures, including the utilization of a world wide client platform, and the right to grant sublicenses to third parties to own and operate property shops 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 the franchisor selects in the United States or in Hamburg, Germany. The franchisee must pay for any fees and all the costs of transportation, lodging, meals and other expenses of the attendees. Attendance at theses courses is mandatory. The franchisee and their designated employees, will also be required to attend additional initial training or refresher courses in accordance with the Engel & Volkers training program applying at any given time at the franchisors then current fees.
Territory: The franchisee will receive exclusive rights to operate and/or sublicense a licensed business at specific locations in the territory. The territory the franchisee will receive is based on the size of the market, population figure, and volume of transactions.
Term of Agreement and Renewal: The term of the franchisee agreement is 10 years with an option to renew for 1 period of 5 years and 2 additional 2 year periods.
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 an office manager.
Number of Units: 474 Engel & Völkers licences worldwide.
Investment Tables:
Initial Investment:
| Expenditure | Low | High |
|---|---|---|
| Training Fees | $10,540 | $10,540 |
| Travel and Living Expenses During Training | $10,000 | $15,000 |
| Furniture, Equipment and Signs | $55,000 | $120,000 |
| Supplies | $5,000 | $15,000 |
| Computer | $15,000 | $30,000 |
| Advertising | $3,500 | $15,000 |
| Insurance | $5,000 | $8,000 |
| Grand Opening | $10,000 | $25,000 |
| Basic equipment to open a Property Shop | $2,500 | $7,500 |
| Additional funds – 3 months | $45,000 | $60,000 |
| Total | $155,520 | $321,200 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalties | 3% of net commission on the franchisee’s sales |
| Renewal fee | $143,750 |
| Marketing fund Contributions | 0.5% of net commissions on the franchisee’s sales |
| Regional marketing fund contributions | 1% of net commissions on the franchisee’s sales |
| Licensing Distribution training fees | $1,750 per person |
| Sales agent (Residential) training fee | $990 per person |
| System training fees | $8790 per person |
| Assistants training fee | $950 per person |
| Sales agents local training fees | $5,490 |
| Commission to Engel & Volkers | 10% of the net proceeds from training fees the franchisee charge their employees and sales agents |
| Global guide magazines | $740 each quarter |
| Global guide advertisements | 2 property advertisings at $1,990 each per year |
| Monthly Software License and IT-Services fee | $100 for each user per month |
| Additional IT-services fees | According to then current IT-Services Price List |
| Transfer fee | 10% of sales price |
| Interest | 1½% per month or the highest rate permitted by applicable law on any balance unpaid by more then 10 days |
| Franchise registration costs | Varies under circumstances |
| 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 the franchisees 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 the franchisee make to the franchisor |
| Inspection and audit costs | The franchisee must reimburse the franchisor for the cost of inspection or audit, including the charges of their employees, attorneys and accountants, and travel expenses |
| Attorney’s fees | Varies |
Date of FDD: 2008
The above information has been taken from the UFOC/FDD and online sources of Engel & Völkers.
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