Franchising in Greece: rules for transferring a franchise outlet

When turning an existing business into a franchise network, you also need to plan for the day when a franchisee wants to sell their outlet. A transfer is not simply a change of name at the till: it affects the agreement, use of the trade mark and continuity of operations. A clear process protects the franchise network without trapping a franchisee in a relationship they cannot realistically leave.

1. Clarify exactly what is being transferred

The phrase ‘selling the outlet’ can describe different transactions. Before drafting a clause in your agreement, distinguish between at least the following situations:

• Sale of equipment and stock: the buyer acquires specific assets, but not automatically the right to operate under your trade mark.
• Transfer of the business: the contractual relationship, lease, employees and operating licences or notifications each require separate review.
• Change in company ownership or control: the contracting party may remain the same, while the people making decisions and running the business change.

Ask your legal adviser to define which changes require prior written consent. Do not treat every minor corporate change as a full sale of the business. Focus on changes that materially affect control, funding or day-to-day management.

The agreement should also distinguish between transferring the existing contractual relationship and signing a new agreement with the buyer. These options do not necessarily involve the same term, obligations or financial outcome.

2. Put consent in the right legal context

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific statutory pre-contractual disclosure regime for it. There is also no requirement for franchisors or franchisees to register on a dedicated franchise register. This does not remove general corporate and tax obligations or the operating requirements applicable to each business.

The transfer process rests primarily on the agreement and the general provisions of the Greek Civil Code. Articles 197–198 concern good faith in negotiations and liability for loss culpably caused during them. When performing the agreement, the good-faith requirement in Article 288 and the prohibition on abuse of rights in Article 281 are relevant.

Competition rules also apply, notably Law 3959/2011 and, where its conditions are met, Article 101 of the Treaty on the Functioning of the European Union. A consent clause therefore needs case-specific legal review; it does not confer unlimited discretion simply because it appears in a signed agreement.

The European Code of Ethics for Franchising is a self-regulatory framework, not legislation. Providing the prospective new franchisee with timely, accurate information is essential in a transfer too: it is not enough to assume that the seller has informed them.

3. Establish a predictable approval process

Before offering your first franchise, prepare a short transfer schedule to the agreement. Set out who submits the request, what information is required and when the assessment begins. Specify a contractual deadline for responding once a complete set of documents has been received, without presenting it as a statutory deadline.

The criteria should reflect genuine requirements of the franchise relationship: adequate funding, the ability to be personally involved where required, acceptance of operating standards and completion of the necessary training. Record any shortcomings and explain any refusal in writing. Avoid vague wording that allows similar requests to be treated differently.

Also clarify in advance:

• whether the incoming franchisee takes over the remaining term or signs a new agreement,
• which outstanding matters the seller must resolve,
• whether the outlet requires upgrades and who is responsible for them,
• whether an assessment or transfer fee applies, what it covers and when it is payable.

Approval of the buyer is neither an endorsement of the sale price nor a guarantee of profitability. Keep that distinction clear in every communication.

4. Organise a handover without operational disruption

Use a shared checklist, assigning responsibility and requiring evidence of completion for each action. Check the contractual documentation, whether the lease can continue, the necessary administrative steps and insurance cover. Your accountant and legal adviser should examine the implications of the particular transaction structure, including potential liabilities relating to debts and employees.

Set a specific transition date for orders, invoicing, system access and customer support. Record stock, outstanding orders, customer deposits and service obligations. Handing over a customer database is not simply a file transfer: it requires a review under data protection rules.

On completion day, confirm in writing who is now entitled to use the trade mark and know-how. Revoke old access rights and activate new ones, without shared passwords.

Practical takeaway: plan the transfer process before the first seller comes forward. Clear criteria, documented consent and an organised handover make the change of franchisee manageable for everyone.