Franchising in Greece: territories and online sales

When turning an existing business into a franchise network, you need to answer the question ‘who serves which customer?’ before signing the first agreement. Your company-owned outlet, online shop and new franchisees may all be competing for the same order. Allocating territories properly is not simply a matter of drawing a map: it means creating a clear framework for growth, customer service and fair collaboration within the limits of competition law.

1. Record exactly what you are granting

Start with your business’s current sales. Where do customers come from? Which orders are placed online? How many require delivery, installation or a visit? Your actual service area will often differ from a municipality’s administrative boundaries.

Distinguish between three concepts that are easily confused:

• Location territory: where the franchisee is permitted to operate their outlet.
• Protection against new outlets: whether, and under what conditions, you undertake not to open another company-owned or franchised outlet in the territory.
• Rules on approaching customers: which promotional activities can lawfully be restricted and which cannot.

The promise ‘this territory is yours’ explains none of these. Attach a map to the agreement, with clear boundaries and an issue date. If you refer to postcodes, specify how any changes to them will be handled.

Also record the exceptions you genuinely need: existing company-owned outlets, named major customers or special sales locations. Do not leave yourself an open-ended right to make exceptions that, in practice, undermines the protection you promise.

2. Check the legal limits of exclusivity

Greece has no dedicated law providing a comprehensive framework for franchising, nor a specific mandatory pre-contractual disclosure regime or dedicated state franchise register. The applicable rules include the Greek Civil Code, unfair competition rules, and Greek and EU competition law. Registration with Greece’s General Commercial Registry (GEMI) concerns the business itself; it does not constitute approval of the territorial terms in your agreement.

Law 3959/2011, Article 101 of the Treaty on the Functioning of the European Union and Regulation (EU) 2022/720 on certain categories of vertical agreements are particularly relevant to the allocation of territories. The latter provides an exemption subject to conditions, not blanket permission to impose any restriction.

The distinction between active sales, such as targeted approaches to customers in a particular territory, and passive sales, such as responding to an unsolicited customer enquiry, is crucial. Certain restrictions on active sales may be permitted within an appropriately structured exclusive distribution system. Restrictions on passive sales are generally particularly problematic, subject to specific exceptions.

Do not simply copy a clause that imposes a blanket ban on ‘sales outside the territory’. Seek a tailored legal review of your distribution structure, the exceptions and the applicable market-share thresholds. Trade association codes of ethics are self-regulatory tools, not legislation.

3. Map out how online orders will be handled

Before promising exclusivity, decide how online sales will work. Your existing online shop does not automatically become neutral when you bring franchisees on board: it may continue to compete with their physical outlets.

For each order route, record:

• Who is the seller in relation to the consumer, and who issues the receipt or invoice.
• Who holds the stock, prepares the order and delivers it.
• Who handles returns, complaints and refunds.
• Whether the local franchisee is paid for collection, delivery or another service.
• Who can access customer data, and for what purpose.

For example, collecting an online purchase from a franchisee’s outlet creates work for that outlet without necessarily making it the franchisee’s sale. The relevant payment and responsibility for customer service must be agreed in advance.

A franchisee’s effective use of the internet must not be prevented by restrictions that breach competition law. Customer data sharing must also comply with the General Data Protection Regulation and Greek Law 4624/2019. A shared brand identity does not permit unrestricted sharing of personal data.

4. Turn the map into a workable agreement

Test the rules against real scenarios: a customer from another territory visits an outlet, an online order requires delivery close to two franchisees, or a corporate customer has premises in several cities. Each case needs a clear, lawful answer that does not depend on improvisation.

Also agree a process for resolving disputes and reviewing boundaries. If territorial protection depends on targets, these need objective criteria, reliable data and a defined process for addressing shortfalls, rather than sudden changes.

Disclose material exceptions before signing. Pre-contractual good faith, particularly under Articles 197–198 of the Greek Civil Code, matters even in the absence of a dedicated franchise disclosure law.

Practical takeaway: before offering a territory, prepare a map, an order-handling matrix and clear contractual terms. Review them together with a legal adviser so that your franchise network can grow without conflicting promises.