Buying a franchise: turn verbal promises into contract terms

‘That is included in the arrangement’ does not always mean it is included in the contract. When choosing a franchise brand, presentations and discussions create expectations that need to be carefully documented. This review has one aim: to ensure that anything materially affecting your decision is clearly defined, supported by evidence and, where agreed, contractually binding.

1. Distinguish information from commitments

Not every statement serves the same purpose. A description of how the relationship works, a forecast and a specific promise to provide something are not the same. Before assessing whether a statement protects your interests, record exactly what was said and which category it falls into.

For example, ‘installation is usually completed quickly’ describes past experience or an expectation. By contrast, ‘we will install the ordering system before you open’ appears to be a specific commitment. Even the second statement, however, leaves questions unanswered: who is responsible for installation, what does it cover, and what conditions must first be met?

Create a short table with four columns:

• Statement: the exact wording, without adding your own interpretation.
• Source: who made it, when, and in which document or meeting.
• Significance: why it affects your choice.
• Corresponding contract term: where it appears in the contract, or what still needs clarification.

The table does not, on its own, constitute legal proof. It does, however, help you identify important discrepancies before you commit.

2. Understand what Greek law provides

Greece has no specific law comprehensively governing franchise agreements as a distinct type of contract. The general provisions of the Greek Civil Code on contracts and obligations primarily apply, alongside other rules depending on the nature of the relationship.

There is no specific statutory pre-contractual disclosure document for franchising, nor a specific mandatory minimum period between disclosure and signing. There is also no dedicated register in which a franchise agreement is recorded to certify its contents.

This does not mean that misleading promises or material omissions are permitted. Article 197 of the Greek Civil Code requires parties to conduct negotiations in accordance with good faith and accepted business practice. Article 198 provides, subject to its conditions, for liability for loss culpably caused during negotiations, even if no contract is ultimately concluded.

The European Code of Ethics for Franchising calls for full and accurate written disclosure a reasonable time before any commitment is made. This is a self-regulatory framework, not a Greek statutory disclosure requirement. Check whether, and how, it binds the particular franchisor.

The practical consequence is straightforward: do not substitute the expectation that a future dispute will easily be resolved in your favour for a clear agreement now.

3. Check the ‘entire agreement’ clause

The draft contract may contain a clause stating that the signed document constitutes the entire agreement and supersedes earlier discussions, offers or statements. It may also stipulate that changes are valid only if made in writing.

Do not treat this wording as an insignificant formality. If an important promise appears only in a presentation or email, ask for it to be incorporated into the contract or an expressly referenced appendix. Simply attaching an information brochure does not ensure that every statement in it becomes a binding term.

Also check the order of precedence between documents. If an appendix says something different from the main contract, which takes priority? Each appendix should be clearly identified by title, date or version, so there is no doubt about the agreed content.

An entire agreement clause does not automatically exclude all liability for misleading statements or pre-contractual conduct. Its validity and effects require case-specific legal assessment. In any event, do not sign a statement confirming that you received information that was never actually provided.

4. Turn the promise into a verifiable obligation

For every material commitment, ask for the responsible party, required action, deadline, conditions and method of confirming completion to be specified. Where necessary, also discuss what happens if there is a delay or the obligation is not fulfilled.

In the ordering system example, the clause could clarify which functionality will be delivered, who will arrange connectivity, when testing will take place and how acceptance will be recorded. These are matters for negotiation, not benefits automatically guaranteed by law.

After each substantive meeting, send a written summary and ask for explicit confirmation or corrections. Silence should not be treated as reliable confirmation. Keep the different versions of the proposal and engage an independent lawyer to compare them with the final contract.

Practical takeaway: if a promise is important enough to determine whether you buy the franchise, it is important enough to request a clear written agreement covering it.