Risk Score
Pending analysis
Investment Range
$91,690 - $423,592
Franchise Fee
$35,000
Total US Locations
239
Business Summary
Engel & Völkers Americas, Inc. offers the right to own and operate an Engel & Völkers Residential Real Estate Brokerage for the marketing of residential property. The company initially focused on retail "Property Shops" but now also seeks conversion franchisees who can operate from both retail and non-retail office locations. Engel & Völkers Americas, Inc. also grants master franchises for residential real estate in certain regions and offers yachting brokerage franchises under a separate disclosure document.
Corporate History
Engel & Völkers Americas, Inc. was incorporated in Delaware in November 2005 and began operations in February 2006. It is a majority-owned subsidiary of Engel & Völkers U.S. Holding GmbH, which is part of the broader Engel & Völkers Group. The Engel & Völkers Group's history dates back to 1977 in Hamburg, Germany, where it began specializing in upscale residential properties. The group started offering franchises for its "Property Shops" in 1998. Engel & Völkers Americas, Inc. itself began offering master franchises for residential real estate in the U.S. in February 2006 and direct residential real estate franchises in April 2011. While it previously offered yachting brokerage franchises starting in October 2012, this program was temporarily stopped in December 2014 and resumed in October 2019.
Financial Overview
Investment Range
$91,690 - $423,592
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$50,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$15,000
Equipment Costs (High)
$150,000
Working Capital
$85,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Engel & Völkers Americas, Inc. and its subsidiary are in a sound financial position, with increasing shareholders' equity and positive net income. Net income, however, decreased from $9.1 million in 2021 to $1.7 million in 2023. Historically, the company had cumulative losses, leading to a full valuation allowance on deferred tax assets, which was reduced in 2021. The auditors found no substantial doubt about its ability to continue as a going concern. A potential material contingency exists due to pending class action lawsuits related to residential real estate industry rules and buyer-broker commissions, though the financial impact is currently not estimable.
Financing Details
Engel & Völkers Americas, Inc. does not offer any direct or indirect financing to its franchisees. The company also explicitly states it does not guarantee any franchisee notes, leases, or other obligations.
Performance Metrics
Total US Locations
239
Franchised Units
239
Corporate Units
0
Avg Square Footage
1,375
Franchising Since
2011
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
7
Litigation Summary
Engel & Völkers Americas, Inc. has been involved in several litigations, with three cases currently pending and four having concluded in the past. The pending cases, both filed in 2023, include a class-action antitrust lawsuit alleging a conspiracy to inflate broker compensation and a franchisee complaint regarding territorial encroachment and breach of contract. A concluded case from April 2021 involved a franchisee alleging fraud and California franchise investment law violations, which was settled without Engel & Völkers Americas, Inc. paying any damages. An August 2019 investigation by the Washington State Attorney General concerning "no-poach" provisions was resolved by an Assurance of Discontinuance. Earlier concluded cases from 2011, alleging franchise law violations and breach of contract in New York and Rhode Island, were settled in May 2018 for a total of $125,000 across three related lawsuits.
Bankruptcy History
Engel & Völkers Americas, Inc. has no bankruptcy history to report. Item 4 of the FDD states that no bankruptcy is required to be disclosed for the company or its key personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew, Engel & Völkers Americas, Inc. franchisees must provide written notice at least six months before their current agreement expires. They must be in full compliance with all provisions of the Franchise Agreement and any other agreements with Engel & Völkers Americas, Inc. or its affiliates. Additionally, franchisees are required to sign Engel & Völkers Americas, Inc.'s then-current Franchise Agreement and a general release of claims. The new agreement may include materially different terms and conditions, and a renewal fee equal to 50% of the initial franchise fee will be due.
Training & Support Program
Franchisor Assistance
Before opening, Engel & Völkers Americas, Inc. assists with designating the protected territory, approving the location, authorizing trademark use, providing access to its international network, and offering initial training courses for the franchisee and employees. It also provides access to comprehensive System Documentation, marketing materials, brokerage design specifications, and its proprietary Integrated Product Suite. Ongoing support includes administrative, technical, and marketing assistance, as well as guidance on system improvements and changes through various communication channels. Engel & Völkers Americas, Inc. also manages the National Marketing and Technology Fund to promote the brand, ensures access to its technology network, facilitates the exchange of ideas among franchisees, and offers optional programs and designations for qualified franchisees. The company may also delegate certain services to qualified third parties, such as Grund Genug Verlag for GG Magazine.
Initial Training Hours
53.5
Training Location
Virtual via web-based platforms, or at locations in the U.S. designated by Engel & Völkers Americas, Inc.
Ongoing Support
After opening, Engel & Völkers Americas, Inc. provides ongoing administrative, technical, and marketing support. This includes guidance on system improvements and changes, which may be delivered through bulletins, electronic communications, telephone consultations, or in-person visits. The company manages a National Marketing and Technology Fund for brand promotion, maintains access to its technology network, encourages idea exchange among franchisees, and offers optional programs and designations for qualified franchisees. Engel & Völkers Americas, Inc. may also delegate services to third parties and may offer continuing education for employees.
Franchise Requirements
Ideal Candidate Profile
The ideal candidate profile for an Engel & Völkers Residential Real Estate Brokerage franchise is typically an owner of an existing residential real estate brokerage looking to convert their business. For new start-up brokerages, Engel & Völkers Americas, Inc. seeks businesses located in appropriate markets that are or will be largely composed of real estate agents with strong market reputations, expertise, and established client databases.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
Yes
Technical Skills Required
No
Operational Details
Location Type
commercial
Owner Participation
Absentee Allowed
Territory Type
exclusive
Staff Count
13
Territory Size Requirements
Engel & Völkers Residential Real Estate Brokerage territories are defined by one or several U.S. postal zip codes, with the specific geographic scope determined upon the effective date of the franchise agreement.
Staffing Notes
Engel & Völkers Residential Real Estate Brokerages require a brokerage manager who must be a licensed real estate broker capable of full-time supervision, especially if the owner is not personally involved. All individuals actively participating in real estate activities, including the brokerage manager and sales advisors, must hold the appropriate state real estate license. Sales advisors and employees who support sales advisors are required to complete the Engel & Völkers Engage Training, and at least one administrative employee must complete the Support Path Training (SPT).