Franchising in Greece: fair quality audits

When you turn an existing business into a franchise network, quality cannot depend on your personal presence. You need a way to check whether every outlet meets the agreed standards, without arbitrary judgements or unexpected demands. A fair audit system protects the customer experience, the brand’s reputation and franchisees who invest in running their businesses properly.

1. Turn quality into measurable criteria

Start with the factors that genuinely affect customers and safe operations. Saying that an outlet must ‘look excellent’ is not a sufficient criterion. By contrast, the cleanliness of specific surfaces, the accuracy of an order or compliance with a prescribed procedure can all be checked against concrete evidence.

For each audit item, record:

• The requirement: exactly what should happen.
• The evidence: an observation, supporting document, record or sample of work.
• The severity: the impact of any non-compliance.
• The corrective action: who takes action and how the correction is verified.

Distinguish breaches of mandatory safety rules from departures from brand presentation standards. A problem that puts customers at risk must not be offset by high scores for decorative details. Define critical findings that require immediate attention, regardless of the overall assessment.

Avoid scoring outlets according to an auditor’s personal preferences. If two outlets follow the same agreed procedure, they should receive comparable assessments, even where they differ in ways permitted by the franchise system.

2. Establish the right to audit in the contract

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific statutory regime requiring pre-contractual disclosure for franchises. This does not mean there are no obligations. The general rules of the Greek Civil Code apply, particularly Articles 197–198 on good faith and liability during negotiations, Article 288 on performing obligations in good faith, and Article 281 prohibiting the abusive exercise of rights.

Before signing, explain to the prospective franchisee how audits will be conducted. The agreement should specify their purpose, access to premises and necessary records, notice requirements where applicable, the circumstances in which unannounced visits may take place, and the consequences of findings. It should also set out who bears any reinspection costs and under what conditions.

The European Code of Ethics for Franchising is a self-regulatory framework, not legislation. Its application through association membership or incorporation into a contract does not replace a legal review of your terms.

Where an audit involves employees’ or customers’ personal data, the General Data Protection Regulation, Regulation (EU) 2016/679, and Greek Law 4624/2019 apply. Limit collection to the information needed, define access rights and retention periods, and check the lawful basis for processing. The right to audit is not blanket permission to photograph people or copy customer databases.

3. Test the method before assessing franchisees

Use the audit checklist in your existing business. The aim is not to prove its commercial success again, but to check whether the assessment method itself is clear and workable.

Ask two different members of staff to examine the same items independently. If they reach different conclusions, identify which wording needs to be revised. Also measure the time needed for the visit and its impact on day-to-day operations. An overly extensive audit may create more administrative work than useful findings.

Use a consistent reporting structure: requirement, observation, evidence, severity and proposed action. The phrase ‘inadequate service’ is unhelpful. Describing the specific step that was missed allows the franchisee to understand and correct the problem.

Set audit frequency according to risk and compliance history, not personal relationships. Communicate changes to the criteria before using them in assessments, allowing a reasonable adjustment period where needed.

4. Close each finding with a verifiable correction

After the visit, discuss the findings with the franchisee and give them an opportunity to submit comments or additional evidence. The report should not become a final judgement without a review process.

For each instance of non-compliance, agree who is responsible, a deadline proportionate to its severity, and a method of verification. A photograph may be enough to confirm that worn equipment has been replaced, but not to prove that a procedure is being followed consistently. That requires further observation or a review of relevant records.

Investigate the root cause too. Repeated non-compliance across several outlets may point to an unworkable requirement or inadequate support from the franchisor. Sanctions do not fix a flawed system.

Practical takeaway: Before bringing your first franchisee on board, prepare a clear audit checklist, agree the process contractually and test a full cycle of corrective action. This makes auditing a tool for building trust across the franchise network, rather than a source of unwelcome surprises.