Franchising in Greece: how to set fees

Turning an existing business into a franchise network requires more than choosing a percentage of sales. Fees must fund specific services while leaving franchisees enough margin to operate sustainably. For a healthy franchise network, the starting point is the actual cost of the relationship, not the figure that seems easiest to sell.

1. Separate the initial franchise fee from ongoing royalties

The initial franchise fee may cover access to the business system and specific onboarding services. Ongoing royalties relate to the continuing contractual relationship, including the use of the brand identity and know-how, alongside agreed recurring services. The precise allocation depends on the business model and the agreement; there is no mandatory standard fee schedule.

Before setting amounts, list what you deliver once and what you provide on an ongoing basis. For each service, record who is responsible, the working time involved, external costs and any travel expenses. Do not treat the founder’s time as a free resource: as the number of franchisees grows, someone will need to take on that work.

Create an internal table with three categories:

• One-off services: initial training, onboarding preparation and launch support, where included.
• Recurring services: operational guidance, updates to procedures and regular support.
• Separate charges: additional training, specific software licences or other services outside the core package.

The aim is to avoid charging twice for the same service and to ensure prospective franchisees know what the offer actually includes.

2. Choose a fee mechanism that works in day-to-day operations

Ongoing royalties can be agreed as a fixed amount, a percentage of a defined calculation base, or a combination of the two. No mechanism is automatically the best fit. A fixed amount offers predictability but places a proportionately greater burden on an outlet with low sales. A percentage tracks trading activity, but does not guarantee that the franchisor’s support costs will be covered.

If you use a percentage, the term ‘turnover’ is not enough. You need a clear calculation base, specifying how VAT, returns, cancellations, discounts, gift cards and orders placed through third-party platforms are treated. Clarify, for example, whether platform commissions are deducted before the royalty is calculated. The answer should be agreed in advance, rather than left to conflicting interpretations after the first invoice.

If you introduce a minimum monthly fee, pay particular attention to the start-up period and seasonality. If fees can be adjusted, describe the mechanism, the frequency and how franchisees will be notified. A vague right to increase fees is not a sound basis for financial planning.

3. Test the total burden, not just the percentage

Before presenting your commercial proposal, model all proposed charges against the existing business’s actual figures. This is an internal check on the fee structure, not a guarantee that a new outlet will achieve the same results.

Include ongoing royalties, compulsory subscriptions, advertising contributions and every other contractual charge. Also consider the cost of mandatory purchases: a low headline fee can sit alongside a high overall cost of being part of the network.

Test scenarios involving lower sales, higher staffing costs and increased operating expenses. Assess two questions separately: can the franchisee meet their obligations, and can the franchisor deliver what they have promised? If the network constantly needs new initial franchise fees to support existing franchisees, the model needs reviewing.

Ask an accountant to check the tax treatment of each charge and how it should be invoiced. Clearly distinguish amounts before tax from the final amount payable, so that the commercial presentation does not understate cash requirements.

4. Translate the fee structure into clear contractual terms

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific register of franchisors. There is also no legally prescribed standard pre-contractual disclosure document or specific minimum waiting period before signing an agreement or paying a fee.

This does not mean there are no rules. The general provisions of the Greek Civil Code apply, particularly the duty of good faith in negotiations and in fulfilling obligations. Competition rules also apply, including Greek Law 3959/2011 and, where the relevant conditions are met, Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Regulation (EU) 2022/720 on vertical agreements. The European Code of Ethics for Franchising is a self-regulatory framework, not Greek law.

Ask a lawyer to set out the calculation base, start date, payment deadline, exceptions and error-correction procedure for each fee. Check that the offer and the agreement describe the same charges.

Practical takeaway: before seeking franchisees, complete a fee schedule linking every charge to a specific service, and test its overall financial impact on both sides.