Franchising in Greece: how to set sustainable fees

Turning an existing business into a franchise network requires a crucial decision: what will franchisees pay, and exactly what will they receive? Fees should neither copy a competitor’s charges nor simply meet the franchisor’s cash flow needs. They require careful costing, stress-testing and clear contractual terms, so that growth supports both sides.

1. Start with the cost of your commitments

Before setting any fee, list the services you will provide before and after each new unit opens. Separate one-off tasks from ongoing support. Initial training, site assessment and having a team present at launch have a different cost profile from regular visits and day-to-day technical assistance.

For each service, record who delivers it, how long it takes, what expenses it incurs and how often it is repeated. Include the founder’s time: the fact that it is not currently charged separately does not mean it is free or available without limit.

Divide the budget into three categories:

• Franchisee onboarding: assessment, training, preparation and opening support.
• Ongoing support: operational guidance, quality checks, systems and further training.
• Shared infrastructure: the central team, product development and tools serving the entire network.

Do not spread shared infrastructure costs across an optimistic number of future franchisees. Model a slow-growth scenario as well. Otherwise, your first agreements may create commitments you cannot fund.

2. Give each fee a distinct purpose

The initial franchise fee may cover onboarding and access to the system, know-how and agreed rights of use. It is not the same as the franchisee’s total investment. Fit-out, equipment, the rental deposit, opening stock and working capital should be shown separately.

Ongoing fees fund the continuing contractual relationship and support. They may be agreed as a fixed amount, a percentage of a defined calculation base, or a combination of the two. No single option suits every business. A fixed amount makes planning easier but places a proportionately greater burden on a unit with low sales. A percentage-based fee tracks turnover, but not necessarily profit.

If you charge a contribution to shared marketing, keep it separate from the support fee. Define permitted expenditure, how franchisees will be kept informed and how any unspent balance will be treated. Also clarify whether additional local advertising expenditure is required.

List all other compulsory charges: software, additional training, renewal, transfer and mandatory purchases. If the franchisor also earns a margin on supplies, factor this into the overall financial model. The true cost to the franchisee extends beyond the headline percentage charged as an ongoing fee.

3. Test whether the model works for both sides

Use actual figures from the existing business, adjusted to reflect the circumstances of an independent franchisee. Include reasonable remuneration for the owner’s work, even if the owner currently performs several roles. Consider differences in rent, staff costs, seasonality and delivery platform commissions, where applicable.

Prepare separate profit and loss projections and cash flow forecasts. A unit may show an operating profit yet struggle to pay equipment instalments, buy stock or meet tax obligations. Test lower sales, a delayed opening and higher supply costs, without presenting assumptions as guaranteed results.

On the franchisor’s side, assess whether recurring income covers ongoing support. If the central team’s operations permanently depend on new initial franchise fees, the model needs revising.

A useful decision rule: if a sustainable support fee leaves the franchisee with insufficient financial headroom, do not hide the gap in additional charges. First improve the business’s operations, cost structure or value proposition.

4. Translate the calculations into contractual terms

Greece has no single, dedicated franchising law, no general compulsory system for registering franchise agreements and no specific statutory pre-contractual disclosure period for franchising. This does not mean there are no rules. The general provisions of the Greek Civil Code apply, including those on freedom of contract, good faith and pre-contractual liability, alongside competition law. Relevant legislation includes Law 3959/2011 and, where the applicable conditions are met, Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Regulation (EU) 2022/720.

Codes of ethics and professional associations’ membership criteria are self-regulatory rules, not a universal state licensing system. Registration with Greece’s General Commercial Registry (GEMI) does not constitute approval of a franchise’s financial model.

With the help of a lawyer and an accountant, specify:

• The calculation base: whether VAT is excluded and how returns, discounts and online sales are treated.
• When each fee starts to apply, when it is invoiced and when payment is due.
• Which services are included and which attract additional charges.
• The fee adjustment mechanism, minimum fees and the procedure for verifying sales.
• How advance payments will be treated if a site is not approved or the franchise arrangement does not proceed.

Give prospective franchisees time to obtain independent advice before committing. The practical takeaway: finalise your fees only when you can explain every amount, substantiate the service it covers and demonstrate that the overall model is sustainable without continually recruiting new franchisees.