We have the agents on the vm. I can restore the entire vm and the vhds but have no option to restore individual files or folders.
When you want to restore individual files/folders, you should expand the netbios/FQDN of the VM to see the individual files/folders. You would not be able to see individual files/folders if you try to expand the VM under the VM host.
If you have done the above and is still unable to see the individual files/folders, do a backup of the VM as a physical machine. You would then be able to restore individual files/folders from your VM backups by clicking on the VM's netbios name/FQDN