Franchising in Greece: which company signs the agreement?

A successful business preparing to expand through franchising needs a clear answer to one question: who exactly will be the franchisor? The company operating the existing outlet does not have to be the one signing the new agreements. However, that choice affects usage rights, invoicing, support and the information given to prospective franchisees. It is not simply a decision about a new company name.

1. Existing or new company: start with the functions

In Greece, you do not need a separate company simply to develop a franchise network. You can use your existing business or consider setting up a new entity, with legal and tax advice. Neither option is automatically better.

The existing company may already have staff, equipment, contracts and a proven operating track record. However, it will take on new contractual obligations towards franchisees alongside those arising from its day-to-day business.

A new company can make it easier to organise network development and support as distinct functions. It must, however, have genuine resources and lawful access to everything it promises to provide. Incorporating it does not automatically transfer staff, know-how, contracts or rights from the existing business, nor does it remove pre-existing liabilities.

Before deciding, set out:

• Who operates the existing outlet and bears its costs.
• Who holds the rights that will be granted.
• Who employs the people who will support franchisees.
• Who will receive each fee and be responsible for the corresponding service or benefit.

With this overview, your accountant and lawyer can compare practical alternatives, rather than simply different legal forms.

2. Check the chain of rights and obligations

The future franchisor must be legally entitled to grant everything described in the agreement. If the trade mark belongs to the founder or another company, check that an appropriate licence is in place, including the right to sublicense to franchisees where necessary. Common ownership of the companies is not enough.

Similar checks are needed for photographs, training materials, software, the website and manuals. Software lawfully used at the original outlet may not be licensed for use by independent franchisees. Check the licences before including its use among the contractual benefits.

Prepare a simple table with four columns: asset or service, current rights holder, franchisor’s entitlement, and required document. Assign a person responsible and a completion date to each outstanding item.

For example, if the new company signs the agreements but the existing company provides technical support, there needs to be a written arrangement between them. This should clarify the scope of the service, availability, fees and how any interruption or discontinuation will be managed. From the franchisee’s perspective, the key issue remains which company has assumed contractual responsibility.

3. Distinguish company registration from franchising rules

Greece has no dedicated law providing a comprehensive framework for franchise agreements, nor a specific compulsory register of franchisors. Registration with the General Commercial Registry (GEMI), where required, concerns the business and its corporate disclosures; it is not state approval of its business system.

The general rules of the Greek Civil Code apply, particularly those relating to contracts and good faith. Articles 197–198 cover pre-contractual conduct and the associated liability. There is no specific law requiring a standardised disclosure document or a uniform disclosure period exclusively for franchising. This does not remove the obligation to provide truthful and meaningful information.

Depending on the nature of the arrangement, Law 3959/2011 and Article 101 of the Treaty on the Functioning of the European Union also apply to competition matters, alongside Law 4679/2020 on trade marks. The European Code of Ethics for Franchising is a self-regulatory framework, not legislation. Membership of an association does not replace legal obligations.

With your accountant, also check the company’s objects, the appropriate Greek business activity codes (KAD) and any required amendments. With your lawyer, confirm who is authorised to represent the company and what approvals are needed to sign.

4. Align documents, invoices and the actual position

Before requesting a signature or payment, compare the company name and details across information materials, the offer, the agreement, invoices and other accounting documents, and the bank account. Any discrepancy must have a clear, documented explanation.

If the franchisor is newly established, do not present the existing company’s turnover as its own. Explain which business operates the original outlet, which has the experience and how the new entity draws on that experience. Common ownership does not make financial statements interchangeable.

Finally, check every proposed payment: what service or benefit it relates to, who owes the payment and who issues the invoice or other accounting document. If another company acts as an intermediary, the arrangement needs supporting contractual and tax documentation.

Practical takeaway: before signing the first agreement, complete a one-page map linking every right, service and payment received to a specific business. Wherever that link remains unclear, resolve it before signing.