Franchising in Greece: planning a franchisee’s exit

Before granting your first franchise, you need to know not only how a franchised outlet will open, but also how it will leave the network. A well-organised exit plan protects customers, your brand identity and your relationship with the franchisee. In franchising, responsible growth also means bringing partnerships to an orderly close.

1. Separate the legal ending of the agreement from the practical exit process

Expiry of the agreed term, termination by mutual consent and termination for breach are not the same thing. The agreement should distinguish between these situations and set appropriate notice procedures, deadlines and consequences for each. The exit plan describes what happens once the end of the relationship has been lawfully established; it does not replace a legal review of how the agreement is brought to an end.

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific register of franchise agreements. The main rules that apply are the general provisions of the Greek Civil Code on contracts and obligations, including good faith and the prohibition on abuse of rights. Depending on the terms, competition law also applies, particularly Law 3959/2011 and Article 101 of the Treaty on the Functioning of the European Union (TFEU), as does trade mark legislation, particularly Law 4679/2020.

Ask a lawyer to draft the contractual terms, then turn them into a practical exit schedule attached to the agreement. For each action, record who is responsible, the deadline, the cost and the evidence needed to confirm completion. Do not leave significant financial obligations in a manual that can be changed unilaterally.

2. Define how use of the brand identity will end

An exit is not complete simply because an external sign has been taken down. The network’s identity may remain on packaging, uniforms, vehicles, menus or catalogues, websites, social media accounts and map listings. Draw up an inventory of these brand touchpoints before taking on your first franchisee, so that every new outlet follows the same process.

The exit schedule should specify:

• Which physical items must be returned, removed or altered, and who bears the cost.
• Who manages each digital account and how its details will be changed.
• How licences to use materials and access to the network’s systems will be revoked.
• How completion will be confirmed, for example through photographs and a signed completion record.

Do not assume that an account transfers automatically simply because it displays your trade mark. Ownership, contractual licences and platform rules each need to be checked separately. Equally, ending the use of the trade mark does not automatically prohibit the former franchisee from carrying on any future business activity.

3. Resolve outstanding obligations without leaving customers stranded

The most difficult part of an exit often concerns products or services that have already been sold but not yet supplied. Consider deposits, prepaid services, gift cards, product returns and warranty claims. For each category, it must be clear which business has undertaken the obligation towards the customer.

An internal agreement between franchisor and franchisee does not override customers’ statutory rights. If another outlet is to take over outstanding obligations, review the agreements required, how customers will be informed and how any necessary personal data can be transferred lawfully.

Prepare a schedule of outstanding orders and obligations showing the order number, amount, fulfilment status and person responsible for resolving each item. Also agree a joint, factual customer notice explaining when the franchise relationship ends, whom customers should contact and who will handle their enquiries. Avoid public recriminations and promises of support that have not been agreed.

For stock, establish in advance whether a buyback is available and on what terms. Specify the required condition of products, valuation method, transport costs and treatment of unsuitable items. Do not present a buyback as guaranteed where there is no obligation to provide one.

4. Complete the final handover with controlled access

Appoint a co-ordinator on each side and draw up a handover timetable. The final inventory should cover equipment owned by the franchisor, manuals, confidential materials, outstanding financial matters and access rights. Distinguish agreed matters from those still in dispute, rather than using a general handover record as a substitute for a detailed reconciliation.

Do not require the indiscriminate deletion of all data. The General Data Protection Regulation (GDPR) and Greek Law 4624/2019 require appropriate handling of personal data, while some records may need to be retained to meet tax obligations or deal with legal claims. Define which records must be returned, which must be deleted and which may lawfully be retained with restricted access.

Test the process against a hypothetical exit scenario before signing the first agreement. If you do not know who disables an account or who takes responsibility for an outstanding order, there is a gap that needs to be addressed.

Practical takeaway: Plan the exit alongside the entry. A clear contractual schedule, an inventory and a named person responsible for each action reduce uncertainty when the relationship ends.