Buying a franchise: who sets the selling prices?

A franchise network’s shared identity does not mean that every outlet must charge the same prices. Before buying a franchise in Greece, check who decides the final selling price and what happens during promotions. This directly affects both your profit margin and the legality of the contract terms. Your checks should cover the agreement as well as how the network actually operates.

What Greek and EU law allows

Greece has no specific law governing franchising as a whole. The general provisions of the Civil Code apply, including those on good faith during negotiations and the performance of the contract. There is no mandatory franchise-specific pre-contractual disclosure document, nor any requirement to register on a dedicated franchise register. You therefore need to actively request details of the pricing policy before committing.

Particularly relevant to pricing are Law 3959/2011 on the protection of free competition and, where the conditions for its application are met, Article 101 of the Treaty on the Functioning of the European Union. Regulation (EU) 2022/720 provides a block exemption for certain vertical agreements, subject to specific conditions.

The franchisor and franchisee are generally independent businesses. Imposing fixed or minimum resale prices is a hardcore restriction and prevents the agreement from benefiting from this exemption. Recommended or maximum prices may be permitted, provided they do not become fixed or minimum prices through pressure or incentives.

This does not mean that every shared price list is unlawful. It means that your solicitor must examine the specific arrangement and how it is implemented. Calling a price ‘recommended’ is not enough if, in practice, departures from it are prohibited.

Ask for evidence of genuine pricing freedom

Do not stop at asking, ‘Can I change prices?’ Request the current price list, the relevant contract terms, promotional guidelines and a demonstration of the till system. Check whether the written answers match what the outlet’s systems actually allow you to do.

Useful questions to ask the franchisor include:

• Can I sell below the recommended price without prior approval?
• Who is authorised to change prices in the system, and how long does a change take?
• Is there a maximum price, and how is it communicated?
• Are discounts on supplies, benefits or other rewards linked to following particular prices?
• What happens when an outlet does not follow a pricing recommendation?

Speak to existing franchisees too. Ask about actual instances of price changes, not just what is theoretically allowed. Centralised technical management does not in itself prove a breach, but a locked price list with no meaningful scope to depart from it needs careful legal scrutiny.

Separate promotion from the funding of discounts

A shared campaign may attract customers without producing the same financial outcome for every outlet. Before signing, ask whether participation in promotions is optional, who determines their duration and who bears the cost of the price reduction.

Pay particular attention to bundle offers, vouchers and loyalty rewards. Who reimburses the outlet for a centrally issued voucher? When is reimbursement paid? Can one discount be combined with another? What happens when advertising materials have already announced a particular price?

Ask your accountant to calculate the contribution from each sale: revenue excluding VAT, less the cost of the product, packaging, transaction fees and any other sale-related charges. This will show you what remains to cover fixed costs. More transactions do not automatically mean better financial performance.

Do not treat a campaign’s commercial value as proof that its terms are lawful. A mandatory uniform price needs specialist assessment even when it applies for a limited period.

Resolve outstanding issues before signing

Ask for a clear contractual framework that distinguishes between recommended prices, any maximum prices and the process for taking part in promotions. Also record who funds each discount, how reimbursements are settled and what procedure applies when an incorrect price appears at the till.

The legal review should cover all relevant schedules and guidelines, not just the main agreement. Ask for contradictions to be resolved, such as a clause recognising pricing freedom alongside a separate instruction imposing penalties for departing from recommended prices. Do not assume that your signature automatically makes a restriction of competition lawful.

Practical takeaway: before committing, make sure you know who changes prices, how much genuine freedom you have and who pays for each promotion. Check the answers against the contract, the till system and your own calculations.