Franchising in Greece: protecting know-how during discussions

When turning an existing business into a franchise network, you need to demonstrate that other entrepreneurs can replicate its success. That does not mean handing over every recipe, file or commercial agreement at the first meeting. In franchising, trust is built through transparency and clear boundaries. A structured disclosure process protects your know-how while allowing prospective franchisees to make an informed assessment of the opportunity.

1. Distinguish know-how from general information

Before you begin presentations, list the elements that make your business replicable: specialist production methods, costing procedures, equipment settings, purchasing criteria or specific customer service techniques. Not all of these automatically qualify as trade secrets. Publicly available information or standard business practice does not become secret simply because a contract says it is.

Divide your material into three practical categories:

• Public: a description of the proposition, key product features and an overview of the franchise relationship.
• Confidential, for evaluation: detailed operating data, financial model assumptions and non-public commercial terms.
• Restricted access: complete recipes, critical technical parameters and detailed procedures that would enable immediate copying.

For each file, identify who is responsible for it, who may receive it and at what stage it may be shared. This helps avoid the common mistake of sending out the entire set of operational materials because someone has asked for ‘more detail’. Also check which information genuinely belongs to your business and which comes from suppliers with their own restrictions on use.

2. Understand what Greek law protects

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific statutory regime requiring pre-contractual disclosure for franchises. The general provisions of the Greek Civil Code on contracts and good faith apply, among other rules. Articles 197–198 of the Civil Code address conduct during negotiations and liability for harm caused through fault at that stage.

For trade secrets, Law 4605/2019 transposed Directive (EU) 2016/943, adding relevant provisions to Law 1733/1987. In broad terms, protection requires information to be secret, to have commercial value because it is secret, and to have been subject to reasonable protective measures by its lawful holder.

A signed confidentiality agreement is therefore not enough on its own. Practical safeguards are also needed: tiered access, controlled file sharing, records of what has been provided and appropriate confidentiality obligations for anyone handling the material.

The European Code of Ethics for Franchising is a self-regulatory framework, not legislation. It provides for full and accurate written disclosure within a reasonable time before signing. Confidentiality must not become an excuse for concealing material risks or obligations.

3. Agree the rules before opening the files

Before sharing sensitive information, ask a lawyer to prepare a confidentiality agreement tailored to your process. A generic template may fail to address the permitted purpose of use or impose unjustifiably broad restrictions.

The agreement should clarify:

• which information is covered and which exceptions apply, such as information already in the public domain or lawfully known to the recipient,
• that the information may be used only to evaluate the potential franchise relationship,
• which advisers may have access and what obligations they must accept,
• how legally required disclosure will be handled,
• what happens to copies, notes and files when discussions end,
• how long the obligations last and how a suspected leak should be reported.

Do not confuse confidentiality with a blanket ban on business activity. The aim is to prevent unauthorised use of specific information, not to exclude a prospective franchisee from the market altogether. Any non-compete or penalty clauses need separate legal review.

4. Grant access in stages and keep records

In the initial presentation, explain how the business operates without revealing the critical details that make it work. At the next stage, once the confidentiality agreement is in place, provide enough information for meaningful financial and legal due diligence. Disclosure of certain purely operational details may be tied to the start of the contractual relationship, provided this does not deprive the prospective franchisee of essential pre-contractual information.

For example, you can substantiate the costs and production requirements of a product without handing over the exact recipe at the outset. You cannot, however, conceal the need for expensive specialist equipment or a binding requirement to purchase a particular ingredient or material.

Use individual access accounts, expiry dates and a record of the document versions shared. Remove unnecessary personal data relating to employees or customers; a confidentiality agreement does not replace data protection obligations. For site visits, agree in advance on rules for photography and access to screens or production areas.

If discussions end, revoke access and follow the agreed return or deletion procedure, subject to any necessary exceptions for lawful retention.

Practical takeaway: Before your next meeting, prepare an inventory of confidential information, a legally reviewed agreement and a staged access plan. Protect the operational detail without concealing the realities of the investment.