Buying a Franchise in Belarus: How to Check the Contract Term and Renewal Conditions

When buying a franchise, you expect to operate under the brand long enough to recover your investment and make a profit. But the term advertised in a sales presentation, the duration of the contract and the time your outlet actually trades may not be the same. A long-term franchise relationship starts with clear rules: when your rights take effect, how long they last and on what terms you can continue trading. Check these points before paying or launching the business.

1. Establish when the term starts

In Belarus, franchising is specifically regulated by Chapter 53 of the Civil Code. The legal term for the agreement is a ‘comprehensive business licence agreement (franchising)’. Article 910 allows a package of licensed rights to be granted for a fee, either for a fixed term or without a specified term. The absence of an end date is therefore not necessarily an error, but nor does it guarantee indefinite protection for your investment.

Under Article 910-1, the agreement must be in writing and registered with the patent authority, the National Centre of Intellectual Property. Failure to obtain the required registration renders the agreement invalid. Signing the document and becoming legally entitled to exercise the rights it grants should not be treated as the same event.

Ask the franchisor to explain how four dates fit together:

• signing the agreement;
• its state registration;
• handing over materials and fulfilling pre-opening obligations;
• opening the outlet to customers.

If the term runs from signing, fitting out the premises and waiting for registration may reduce your actual trading time. If the agreement specifies a fixed end date, postponing the opening will not, by itself, change it. Check whether the term can be adjusted for delays for which the franchisor is responsible, and how that adjustment must be documented.

What your checks should establish: you should be able to identify not only the contract’s end date, but also the expected number of months of full operation under the brand.

2. Compare the term with your investment payback period

Assess the contract term alongside your spending schedule, rather than in isolation. A substantial share of the investment is usually spent before the first sales: on fitting out the outlet, equipment, training and launch costs. Meanwhile, the contract term may already be running.

Build a month-by-month financial model covering only the confirmed period during which you can use the franchise. Do not add future years simply because a brand representative says, ‘We always renew our agreements.’ Continued cooperation should be a separate scenario, not an unspoken assumption needed to make the figures work.

Test three scenarios:

• Base case: the outlet opens on schedule and the agreement runs until the specified date.
• Delayed opening: the launch is postponed, but the end date stays the same.
• Renewal: trading continues, with the agreed costs of the new term.

Check whether the business can recover its initial investment in the first two scenarios. Assess separately whether equipment could be used elsewhere or sold: the residual value of assets is not a guaranteed recovery of the money spent on them.

It is also worth comparing the franchise term with the duration of your lease and significant commitments to contractors. If you must keep paying for premises after your right to trade under the brand ends, you face a financial mismatch. Address this before entering into related contracts, rather than in the final month of the franchise relationship.

3. Work through the renewal procedure step by step

The phrase ‘the agreement may be renewed by mutual consent’ allows for negotiations but does not guarantee their outcome. As a prospective franchisee, you need to understand what you must do and what the franchisor is obliged to do.

Ask for the draft agreement or an agreed renewal procedure to answer the following questions:

1. How far in advance must the franchisee apply for renewal?
2. To whom should the application be sent, and by what method?
3. How long does the franchisor have to consider it and communicate a decision?
4. Which documents and performance indicators will be reviewed?
5. Can any identified breaches be remedied before a final decision is made?
6. How long will the renewed relationship last, and what procedure will be used to formalise it?

Conditions such as ‘subject to satisfactory performance’ should ideally be defined through verifiable criteria. For example, specify which obligations must have been met, the period over which breaches will be reviewed and how remedial action will be taken into account. Otherwise, the parties may have different views on whether the outlet qualifies for renewal.

Also clarify the legal form of renewal: will the existing agreement be amended, or will a new one be signed? Amendments to a franchise agreement must also be registered. Work with a lawyer to establish the necessary steps and deadlines so that the paperwork does not leave a gap during which you lack the proper right to operate under the brand.

Do not infer the existence or absence of statutory rights to continue the relationship solely from the commercial wording. A lawyer should review the draft terms alongside the applicable provisions of the Civil Code.

4. Put the costs of the next term in writing

Even an agreement to renew does not mean the financial terms will remain unchanged. Before buying, request a list of the fees and requirements that may apply when moving into the next term.

Discuss whether another initial franchise fee will be payable, whether ongoing royalties will change and who will pay for documentation and registration. If the terms will be based on the fee schedule in force at renewal, clarify how it will be provided and how far in advance you will receive an offer. Being able to assess costs beforehand matters more than a verbal promise of ‘favourable terms’.

Ask for a written example of how renewal would work for your particular outlet: which documents would be signed, what would be payable and which steps would need to be completed before trading continues. This does not replace the contract, but it can help uncover conditions that have not yet been discussed.

Set an internal reminder to begin negotiations ahead of the contractual notice deadline. Allow time to assess the new terms, obtain legal advice and complete registration, as well as to decide for yourself whether the next term suits your business.

Practical takeaway: buy a franchise with a clear understanding of the financial outlook over the confirmed contract term. Assess renewal separately: check the procedure, criteria, costs and formalities before including future years in your financial plan.