diff --git a/monkey/monkey_island/cc/server_setup.py b/monkey/monkey_island/cc/server_setup.py
index dd5547659..c6dc9c0b9 100644
--- a/monkey/monkey_island/cc/server_setup.py
+++ b/monkey/monkey_island/cc/server_setup.py
@@ -70,7 +70,8 @@ def _setup_data_dir(island_args: IslandCmdArgs) -> Tuple[IslandConfigOptions, st
     except json.JSONDecodeError as ex:
         print(f"Error loading server config: {ex}")
         exit(1)
-    except IncompatibleDataDirectory:
+    except IncompatibleDataDirectory as ex:
+        print(f"Incompatible data directory: {ex}")
         exit(1)
 
 
diff --git a/monkey/monkey_island/cc/setup/data_dir.py b/monkey/monkey_island/cc/setup/data_dir.py
index 72a99b59f..af01da050 100644
--- a/monkey/monkey_island/cc/setup/data_dir.py
+++ b/monkey/monkey_island/cc/setup/data_dir.py
@@ -29,33 +29,44 @@ def _is_data_dir_old(data_dir_path: Path) -> bool:
     dir_exists = data_dir_path.exists()
 
     if is_running_on_docker():
-        if _data_dir_version_mismatch_exists(data_dir_path):
-            error_message = "Found an old volume. "
-            "You must create an empty volume for each docker container "
-            "as specified in setup documentation: "
-            "https://www.guardicore.com/infectionmonkey/docs/setup/docker/"
-            raise IncompatibleDataDirectory(error_message)
-        else:
-            return False
+        return _is_docker_data_dir_old(data_dir_path)
 
-    if not dir_exists or not os.listdir(data_dir_path):
+    if not dir_exists or _is_directory_empty(data_dir_path):
         return False
 
     return _data_dir_version_mismatch_exists(data_dir_path)
 
 
+def _is_docker_data_dir_old(data_dir_path: Path) -> bool:
+    if _data_dir_version_mismatch_exists(data_dir_path):
+        if _is_directory_empty(data_dir_path):
+            return False
+        else:
+            raise IncompatibleDataDirectory(
+                "Found an old volume. "
+                "You must create an empty volume for each docker container "
+                "as specified in setup documentation: "
+                "https://www.guardicore.com/infectionmonkey/docs/setup/docker/"
+            )
+    else:
+        return False
+
+
+def _is_directory_empty(path: Path) -> bool:
+    return not os.listdir(path)
+
+
 def _handle_old_data_directory(data_dir_path: Path) -> None:
     should_delete_data_directory = _prompt_user_to_delete_data_directory(data_dir_path)
     if should_delete_data_directory:
         shutil.rmtree(data_dir_path)
         logger.info(f"{data_dir_path} was deleted.")
     else:
-        logger.error(
+        raise IncompatibleDataDirectory(
             "Unable to set up data directory. Please backup and delete the existing data directory"
             f" ({data_dir_path}). Then, try again. To learn how to restore and use a backup, please"
             " refer to the documentation."
         )
-        raise IncompatibleDataDirectory()
 
 
 def _prompt_user_to_delete_data_directory(data_dir_path: Path) -> bool: