Buying a franchise: do you need to be there every day?

Buying a franchise does not necessarily mean you can delegate the running of the outlet and limit your role to oversight. Some franchise arrangements require the franchisee’s active, day-to-day involvement. Before joining a franchise network, consider whether you are buying a business you can run through a manager or one that depends on your continued hands-on work. The distinction affects the agreement, your family plans and the actual financial return.

1. Turn ‘active involvement’ into specific duties

The phrase ‘the franchisee must be actively involved’ is not enough to tell you what you are taking on. Ask whether this means being physically present, personally managing the business or simply being available to make decisions. Reviewing the finances each week is a very different commitment from working in the outlet every day.

Before proceeding, record the answers to these questions:

• Must you be at the outlet on particular days or at particular times?
• Are you personally responsible for sales, customer service, ordering or staff management?
• Are you allowed to pursue other business or professional activities alongside the franchise?
• If a company signs the agreement, which individual must be involved?
• Does the requirement apply only during the launch period or throughout the franchise relationship?

Ask for a sample weekly schedule for the person running the outlet, and speak to existing franchisees about the time they actually spend on the business. Compare outlets of a similar format, without assuming that another franchisee’s experience guarantees your own. Pay particular attention to work outside opening hours: recruitment, stocktakes and administrative duties are often invisible during a visit.

2. Check your contractual obligations in Greece

Greece has no dedicated law providing a comprehensive framework for franchising, nor is there a mandatory standard agreement with prescribed terms. The relationship is governed primarily by the general provisions of the Greek Civil Code on contracts and obligations, alongside other rules that apply depending on the agreement’s content.

Articles 197–198 of the Civil Code concern good faith in negotiations and pre-contractual liability, while Article 288 concerns the performance of obligations in accordance with good faith. There is no specific, legally prescribed pre-contractual disclosure document for franchising, nor a mandatory minimum waiting period before signing.

Do not, therefore, assume that you are automatically entitled to appoint a manager. Ask a lawyer to identify clauses requiring you to work personally in the business, devote yourself exclusively to it or appoint someone to oversee operations. Also check whether these clauses are linked to penalties or a right to terminate the agreement.

A contractual requirement for your personal presence cannot be assessed in isolation. Its precise wording, the other terms and the circumstances all need to be examined. The general duty of good faith is no substitute for a clear agreement on who carries out each day-to-day task.

3. Cost your own work and the cost of replacing you

An outlet may appear profitable because the owner works long hours without any value being assigned to that labour. To judge whether a particular franchise arrangement suits you, ask your accountant to prepare two separate operating scenarios: one in which you work in the business and one with a paid manager.

For the second scenario, include not just gross pay but also employer contributions and other employment costs, holiday cover, cover for other absences and any additional staffing. A manager cannot automatically cover every opening hour or perform every specialist role.

For the first scenario, put a separate value on your own time. This does not mean that every such valuation counts as an accounting expense; it is a tool to help you make your investment decision. Distinguish the reward for your work from the return on the money you invest.

Also check whether the model relies on unpaid family help. Relatives’ involvement needs to be arranged lawfully, with employment and social security obligations checked, rather than based on an informal assumption that they will ‘help out when needed’.

4. Agree cover arrangements before you need them

Even if you intend to work in the business every day, you need a plan for illness, holidays or any other temporary inability to work. Ask for clear provisions covering the qualifications of anyone standing in for you, the notification procedure and, where required, approval by the franchisor.

Negotiate a clear deadline for responding to a request for a replacement, and a separate procedure for emergency absences. Clarify who pays to train and prepare the new manager, and whether there are restrictions on temporarily delegating your duties. Do not assume that approval of one particular manager gives you the freedom to replace them later.

Finally, ask your lawyer to check whether the agreement allows you to remedy a breach before serious contractual consequences take effect. How an unexpected absence will be dealt with proportionately should be discussed before a problem arises.

Practical takeaway: before signing, secure three things: a clear description of your personal involvement, a realistic cost for replacing you and an agreed procedure for arranging cover. If the business only works when you are constantly present, that should be a conscious choice.