Buying a franchise: checking the premises at handover

The promise that “you will receive premises ready to trade” needs to be clearly defined before you sign. In franchising, the fit-out and equipment installation may be organised by different parties, and responsibility for the final result is not always clear. For a prospective franchisee, checking the handover arrangements is a separate step: it protects the initial investment and reduces the scope for disputes as opening day approaches.

1. Establish who is responsible for handover and exactly what you are buying

Start with one question: who is contractually responsible for handing over premises that are ready to operate? This could be the franchisor, an independent contractor or several suppliers working under separate agreements. A recommendation of a contractor by the franchise network does not, in itself, mean that the franchisor guarantees their work.

Ask for a responsibility matrix linking each deliverable to the party responsible, the relevant contract and the payment arrangements. List design, building works, service installations, furniture, equipment and order-taking systems separately. Also record who coordinates the dependencies between them: a machine may have been delivered but still be unable to run without the right utility connection.

The itemised quotation should include:

• quantities, technical specifications and specific equipment models,
• clarification of whether items are new, second-hand or leased,
• transport, installation, testing and operating instructions,
• exclusions, taxes and any additional charges,
• a procedure for approving substitutions of materials or equipment.

Do not rely solely on photographs of another outlet. A similar appearance does not demonstrate equivalent quality, capacity or scope of supply.

2. Link payments to verifiable milestones

A timetable is useful when it describes specific outcomes, not just dates. Ask for separate milestones covering completion of service installations, arrival of equipment, testing and final acceptance. At each stage, you should know who certifies completion and what supporting evidence they will provide.

Negotiate payments that reflect verifiable progress. If a substantial final payment is due before installation, discuss with your adviser how you can protect yourself against non-delivery. Also check who owns the equipment at each stage and who bears the risk of damage during transport or storage.

For delays, ask for a clear procedure covering written notification, explanations and revisions to the timetable. Specify how additional costs, such as equipment storage or repeat visits by technicians, will be handled. Responsibility differs depending on whether the contractor is late or the buyer requests a design change.

Pay particular attention to whether contractual charges payable to the franchise network begin before the business can actually operate. An opening date in a marketing schedule is not evidence that the premises are complete.

3. Agree testing and a formal handover record

The franchisor’s approval of the appearance does not replace a technical inspection. Before committing, agree which engineer or suitably qualified technician will inspect the work and who will pay their fee.

Handover requires practical testing. For example, check that equipment can run simultaneously without problems and that order-taking systems communicate correctly with other applications. Tests should be tailored to the business and the agreed specifications, rather than simply checking whether each device switches on.

The handover record should document:

• what was delivered and which checks were carried out,
• missing items, defects and departures from the specifications, with photographic evidence,
• the party responsible for resolving each outstanding issue and the deadline,
• warranties, serial numbers and technical support details.

Ask your lawyer to draft suitable provisions for acceptance subject to reservations and, where agreed, retention of part of the payment until outstanding issues are resolved. Avoid signing an unconditional completion statement while known shortcomings remain. Starting to trade should not be casually treated as proof that you accept every departure from the agreed specifications.

4. Check how the agreements fit together legally

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific mandatory disclosure document subject to a general twenty-day delivery deadline. The general provisions of the Greek Civil Code apply, including Articles 197–198 on pre-contractual liability and Article 288 on performance in accordance with good faith.

Rules governing contracts for work or sales may also apply to construction and equipment, depending on the substance of each agreement. Rights relating to defects, remedial work or compensation require case-specific legal review. A supplier’s commercial warranty does not necessarily set out all your rights.

Ask for the franchise agreement, building contract and equipment orders to be reviewed together. Conflicting dates or payment conditions could leave you liable for payments on premises that are not yet operational.

Practical takeaway: before signing, secure detailed deliverables, clearly allocated responsibilities, milestone-based payments and a technical inspection and acceptance procedure. “Ready-to-trade premises” must be a verifiable contractual obligation, not merely a sales description.