Franchising or licensing: what are you offering your partners?

A successful business in Greece can expand by licensing its trade mark or offering a complete franchise system. These are not the same thing. Before looking for partners, you need to establish exactly what you will provide, what support you will undertake to deliver and what controls the relationship justifies. In franchising, this clarity protects both the franchisor and the new business owner.

1. Start with what you actually provide, not what you call it

A licence allows a third party to use a specific right, such as a trade mark, within agreed limits. It may include quality standards and checks. On their own, however, these are not enough to constitute a complete franchise system.

Franchising typically combines the use of a trade mark with the transfer of know-how, a shared business identity, a defined operating model and ongoing commercial or technical support. The partner remains an independent business owner but follows an organised business system.

An agreement labelled a ‘licence’ is therefore not assessed solely by its title. Its substance and the way it is implemented matter. Equally, charging a recurring fee does not automatically turn a straightforward trade mark licence into a franchise.

Practical test: describe the relationship without using the words ‘franchise’ or ‘licence’. If you cannot clearly explain what the partner receives, the model still needs work.

2. Document what you can genuinely transfer

Before putting together an offer, create a table with four columns: provision, deliverable, person responsible and frequency. Do not list broad intentions; record actions you can already carry out or have made concrete arrangements to deliver.

For example, consider:

• Brand identity: which elements may be used, and in which media?
• Know-how: which proven procedures will you provide, and how do they differ from general business knowledge?
• Support: who responds to operational problems, and which issues do they cover?
• Tools: who provides the software, recipes, templates or promotional materials?
• Development: who develops new services, and how are they rolled out to partners?

If all you actually provide is a logo and a product catalogue, do not present it as a complete business solution. Conversely, if you require partners to follow an entire system closely, you also need to organise the corresponding support. Your choice of model should reflect the business’s capabilities, not just its growth ambitions.

3. Handle ‘light’ arrangements with care

The label ‘franchise lite’ is not a distinct legal category that automatically reduces the parties’ obligations. It may describe a commercial offering with fewer services, but it still requires an equally clear agreement.

For example, a coffee business might license its trade mark, supply products and provide initial guidance without offering ongoing operational support. Prospective partners must understand this distinction before committing. A verbal clarification is not enough if the sales presentation promises comprehensive support.

Also examine the balance between control and autonomy. The more decisions you require to be approved centrally, the more important it is to specify who grants approval, against which criteria and what happens if approval is delayed. Avoid an arrangement in which the business owner bears all the responsibilities but does not know which decisions they can make independently.

4. Apply the Greek legal framework to the substance of the relationship

Greece has no dedicated law comprehensively regulating franchising, nor a general requirement to register franchise systems in a special register. There is also no specific, legally prescribed pre-contractual disclosure document required for all franchise agreements.

This does not mean there are no rules. The general provisions of the Greek Civil Code on contracts, good faith and pre-contractual liability apply, particularly Articles 197–198 on conduct during negotiations. A misleading description of the support offered may therefore have legal implications, even without a mandatory disclosure form.

Trade marks are governed by Law 4679/2020 and, in the case of an EU trade mark, Regulation (EU) 2017/1001. Restrictions within the relationship are assessed under Law 3959/2011 and, where applicable, Article 101 of the Treaty on the Functioning of the European Union. Regulation (EU) 2022/720 provides an exemption for certain vertical agreements subject to conditions; it is not a blanket approval of every contractual term.

Codes of ethics are self-regulatory tools, not legislation. Their relevance to a particular relationship also depends on membership of a relevant association or their incorporation into the contract.

5. Align your presentation with the contract

Before approaching partners, compare your sales presentation, financial proposal and draft agreement. Every promise should correspond to a specific obligation. Every exception should be clearly visible, not buried in general wording.

Ask a lawyer with relevant experience to assess the actual business model, rather than simply changing the title of a template agreement.

Practical takeaway: first define what you will provide and what support you will deliver. Then choose the form of the relationship and describe it accurately.