Buying a Franchise in Belarus: How to Check Additional Service Obligations

Prospective franchisees usually assess the core product: the menu, the shop’s range or the teaching programme. But taking on a brand also means accepting obligations to provide additional services. Delivery, packaging, product set-up and order support may require staff, equipment and ongoing expenditure. In Belarus, this is not simply a matter of reputation: the franchisee’s duty to provide certain additional services is set out in the Civil Code. Here is what to check before signing the agreement.

1. Separate legal requirements from the seller’s promises

Franchising in Belarus is specifically governed by Chapter 53 of the Civil Code. The legal term for the arrangement is a ‘comprehensive business licence agreement (franchising)’. Under this agreement, the franchisee is the ‘user’, while the party granting the package of licensed rights is the ‘rights holder’.

Article 910-4 of the Civil Code requires the user to provide customers with all additional services they could expect when purchasing goods, work or services directly from the rights holder. This is a mandatory rule that the parties cannot simply agree to exclude.

A seller’s claim that ‘you decide for yourself which services to offer’ therefore needs checking. If a particular service is a normal part of the rights holder’s customer offering, failing to provide it as a franchisee could cause problems. However, the law does not mean that every additional service must be free: you need to examine both the scope of the service and the payment terms separately.

Do not confuse this obligation with statutory consumer rights, such as those relating to faulty goods. Mandatory consumer protection requirements apply whether or not the brand has included the relevant procedure in its standards.

Your task as a prospective franchisee is to establish not only what the agreement says, but also what service the rights holder’s customers actually receive. A franchise sales brochure alone is not enough.

2. List the services before discussing the price

Ask the rights holder to describe the customer journey from the first enquiry through to completion of the service. At each stage, establish which activities are included in the main purchase, which are offered as extras and who carries them out.

Depending on the business model, you may need to check:

• delivery, assembly, installation or product set-up;
• packaging purchases and preparing orders for a specified time;
• after-sales advice and help with using the product;
• storing orders until collection;
• additional services available when visiting an outlet;
• fulfilment of orders placed through the brand’s central channels.

These are examples to investigate, not a universal statutory list. The services required for a particular franchise will depend on the rights holder’s activities and the terms on which it serves its customers.

Request the current customer service policies, customer offers, price lists and relevant sections of the operating standards. Compare them with what you are told during negotiations. If the brand’s website promises delivery but the franchise seller says it is optional, ask for a written explanation of the difference.

Take particular care when assessing a foreign franchise. A service routinely provided in the brand’s home market may require different logistics or a different contractor in Belarus. Do not assume it automatically ceases to apply: agree in advance how it will be delivered locally and have a lawyer review the arrangement against the Civil Code’s mandatory provisions.

3. Calculate the cost of each obligation

Create a separate table of additional services. For each one, record who receives it, the terms on which it is provided, who delivers it, the resources required and who pays. It is also useful to note who handles the customer’s request and how completion of the service is confirmed.

Divide costs into three groups:

• One-off costs: equipment, setting up a service area and establishing the process.
• Ongoing costs: staff time, premises costs and regular payments to contractors.
• Order-dependent costs: packaging, transport, consumables and individual call-out fees.

For example, a promise to set up a purchased product may involve more than a few minutes of a sales assistant’s time. It may require a dedicated space, tools, a suitably skilled employee and provision for follow-up enquiries. Cost the whole process, not just the initial task.

Clarify who receives payment for the service. If the rights holder takes the order and payment but the local franchisee does the work, there must be a clear settlement mechanism. Membership of the network alone does not explain when, or how much, the franchisee will be reimbursed.

Test the financial impact at different levels of demand. A service that is free to the customer still costs the business money. Also consider what happens if a contractor is unavailable: who steps in, what deadlines have been promised to the customer and how much the backup option costs.

4. Set out a workable process in the agreement

Propose recording the agreed list of services in a schedule to the agreement. Its purpose is to specify how the obligation will be fulfilled, not to restrict customers’ rights in breach of the law.

For each service, it is advisable to define its scope, whether a charge applies, the timescale, who is responsible for delivery and how the parties will work together. If a contractor is involved, specify who selects them, signs the contract and pays for their work. Do not treat this allocation of responsibilities as replacing obligations towards the customer: internal arrangements between the parties do not, in themselves, override legal requirements.

Ask the rights holder to confirm which instructions and documents are needed to provide the agreed services. Article 910-3 of the Civil Code requires the user to be supplied with the necessary technical and commercial documentation, as well as instruction on using the package of licensed rights.

Bear in mind the formalities for the transaction: Resolution No. 346 of the Council of Ministers of the Republic of Belarus, dated 21 March 2009, provides for franchise agreements and amendments to them to be registered with the National Centre of Intellectual Property. Any additions to contractual obligations should therefore be formally documented, with the necessary registration steps checked, rather than left in correspondence.

Practical takeaway: before buying a franchise, compile a list of additional services, calculate their full cost and agree in writing how they will be delivered. Do not accept an obligation until you understand exactly what the customer will receive, who will provide it and who will pay.