Buying a franchise: who can see your commercial data?

Joining a franchise community offers valuable opportunities to share experience. But that does not mean every piece of commercial information can circulate freely between outlets. Before buying a franchise, examine what data you will provide to the franchisor, who will see it and for what purpose. The answers affect both your business autonomy and the risk of breaching competition rules.

1. Map how information flows

A central IT system may record daily sales, stock levels, discounts and purchasing costs. Collecting this information can serve legitimate purposes, such as calculating royalties, organising deliveries or assessing operational problems. The crucial question is what happens after it has been collected.

Before committing, ask for samples of the reports the franchisor receives and those distributed to franchisees. A software demonstration using test data is often more informative than a general assurance that ‘everything remains confidential’.

For each category of data, record:

• Who enters it and how often it is updated.
• Who has access, including the franchisor’s company-owned outlets.
• Whether it identifies individual outlets or shows only aggregate results.
• Whether it concerns past performance or future commercial intentions.
• Which operational purpose genuinely requires it.

Also distinguish technical administrators’ access from commercial use of the information. Maintaining the platform does not mean someone needs to use its data to make business decisions.

2. Understand the legal limits on sharing

Greece has no dedicated law comprehensively governing franchise agreements, nor a mandatory pre-contractual disclosure document or specific franchise register. The general provisions of the Greek Civil Code on contracts and obligations apply, alongside other legislation relevant to the circumstances. Pre-contractual good faith remains important, even without a standardised disclosure process.

For the exchange of commercial information, a key reference is Article 1 of Greek Law 3959/2011. Article 101 of the Treaty on the Functioning of the European Union also applies where trade between Member States may be affected. These rules concern agreements and concerted practices that restrict competition.

Operating under a shared brand does not automatically remove businesses’ independence. Franchisees may compete with one another, while the franchisor may also operate its own outlets. Sharing business-specific information about future discounts, margins or commercial plans therefore requires particular care.

Not every exchange is unlawful. The assessment depends on the content, how up to date it is, how frequently it is shared, who receives it and the market conditions. Equally, a confidentiality agreement alone cannot make an exchange that restricts competition permissible.

3. Check reports, meetings and communication groups

Your checks should extend beyond the contract. Ask how regular franchisee meetings, online groups and performance benchmarking tables work. They may be used to share information that appears in no schedule to the agreement.

An aggregate report of historical sales used to assess operations is fundamentally different from a table revealing each outlet’s planned promotions. Even removing business names does not ensure meaningful anonymity if participants can easily identify which business each row refers to.

Ask for specific answers:

• Do meetings have an agenda and someone responsible for overseeing them?
• Are discussions of future commercial decisions between competitors avoided?
• Are benchmarking reports checked for commercially sensitive information?
• Is there a procedure for stopping and reporting problematic discussions?

Do not settle for ‘this is how every network operates’. Ask why each disclosure is necessary and whether the same objective could be achieved with less data or more aggregated information.

4. Ask for specific safeguards before signing

Ask your lawyer to review the agreement, access policy and sample reports together. The aim is not to prevent all data collection, but to define clear purposes, recipients and limits on use.

Practical safeguards may include tiered access permissions, restrictions on onward sharing, aggregate reporting where appropriate and a documented process for approving new uses. Where the franchisor operates competing outlets, its commercial teams’ access to your data requires specific assessment.

Also check whether there is a written competition law compliance policy, relevant training and a clearly identified contact for questions or reporting concerns. These measures do not, on their own, guarantee compliance, but they indicate whether the rules are applied in day-to-day operations.

Practical takeaway: before signing, ask for a simple map of what data you provide, who sees it and why. If the answers remain vague, complete the legal review of information-sharing arrangements before proceeding.