Franchising in Greece: a dispute resolution procedure

When turning an existing business into a franchise network, it is easy to plan the relationship only for the good times. Yet a disputed charge or support that falls short of what was agreed can quickly put that relationship to the test. In franchising, an agreed dispute resolution procedure protects day-to-day operations and enables the two independent businesses to discuss the evidence rather than exchange ultimatums.

1. Clarify the legal framework and the purpose

Greece has no dedicated law comprehensively regulating franchise agreements, nor a specific statutory regime requiring pre-contractual disclosure for franchising. The general rules of the Greek Civil Code apply, particularly those concerning contracts, good faith and pre-contractual liability. Articles 197 and 198 address conduct during negotiations and liability for damage culpably caused at that stage.

Competition rules also apply, particularly Law 3959/2011 and, where its conditions are met, Article 101 of the Treaty on the Functioning of the European Union. A private dispute settlement cannot make an unlawful contractual restriction lawful.

The European Code of Ethics for Franchising is a self-regulatory framework, not Greek law. Its relevance to a particular relationship also depends on any commitments the parties have made in relation to it. Ask a lawyer to incorporate the dispute resolution procedure into the agreement in a way that complies with the applicable law. The aim is not to prevent access to the courts, but to create a genuine opportunity for an early resolution.

2. Establish a single reporting route for every dispute

Before recruiting your first franchisee, decide who will receive complaints and who has the authority to resolve them. If every issue is referred informally to the founder, the procedure is unlikely to work as the number of outlets grows.

Create a simple paper or electronic reporting form covering:

• the specific incident and its date;
• the contractual obligation alleged to have been breached;
• the relevant supporting documents or correspondence;
• the impact on the outlet’s operations;
• the solution proposed by the party submitting the report.

Both the franchisee and the franchisor should have access to the same process. Provide for acknowledgement of receipt, a designated person responsible for handling the matter and an agreed response time. These are organisational and contractual choices, not uniform statutory deadlines applying to every franchise relationship.

Also distinguish routine support requests from formal disputes. A question about using software does not need legal escalation. Repeated failure to provide an agreed service, however, needs to be recorded and addressed by someone responsible for the matter.

3. Plan escalation without automatically creating confrontation

The initial discussion can take place between those responsible for the day-to-day relationship. If no solution emerges, the matter should move to people with the authority to approve corrective action or a settlement. Set out clear stages, without endless internal referrals.

A useful sequence is a written report, an exchange of evidence-backed positions, a resolution meeting and, where appropriate, consideration of mediation. Mediation in civil and commercial matters in Greece is governed by Law 4640/2019. It does not mean that a settlement is compulsory. Whether a mandatory initial mediation session is required for a particular dispute needs separate legal assessment.

For example, if a charge for additional support is disputed, first gather the relevant contractual provision, the order for the service and evidence of its delivery. Then consider whether the issue calls for an invoice correction, an additional service or a clearer agreement for the future. Do not treat every challenge as a refusal to co-operate from the outset.

The procedure must also allow for urgent court relief where necessary. It is not safe to impose a waiting period when there is an immediate risk of serious harm. A lawyer should review these exceptions and how they interact with contractual deadlines.

4. Record the resolution and address the underlying cause

A verbal agreement may ease tensions, but it leaves room for different interpretations. Record what has been agreed, who is responsible for each action, when it will be completed and how implementation will be confirmed. If contractual obligations change, use an appropriate written amendment reviewed by a lawyer.

Do not automatically apply a tailored solution across the whole network. However, consider whether the dispute has revealed a wider ambiguity: inconsistent service descriptions, unclear supporting documents or inadequate information. In that case, the process needs correcting, rather than simply closing the case.

Restrict access to the case file to those who need to handle it, and avoid publicly exposing the other party. Confidentiality must not be used to prevent anyone from lawfully seeking advice or reporting a matter to a competent authority.

Practical takeaway: Before signing your first agreement, test your procedure against a hypothetical dispute. If it is not clear who responds, what evidence they use and what happens next, there is still work to do.