Buying a Franchise in Belarus: How to Check Mandatory Purchasing Terms

Mandatory purchasing from the franchisor or its nominated supplier can help maintain consistent quality. But it can also leave your outlet dependent on someone else’s stock levels and prices. When buying a franchise in Belarus, check not only the entry cost but also the rules governing future supplies. In a sustainable franchise network, product requirements should be matched by clear obligations on those supplying the products.

1. Separate the franchise terms from the supply terms

Franchising in Belarus is specifically regulated by the Civil Code. Article 910 describes a comprehensive business licence agreement, under which the rights holder grants the user a package of licensed rights in return for payment. Article 910-1 requires the agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property (NCIP).

However, granting rights to a brand and information does not, in itself, establish how goods will be delivered. Purchasing may be governed by a separate supply agreement, an appendix or the terms of a mixed agreement. The Civil Code’s general provisions on obligations, together with its rules on sale and purchase and supply, also apply to the relevant obligations.

Before paying for the franchise, request the full set of purchasing documents, including the ordering rules. Establish who your contractual counterparty will be: the rights holder, an affiliated company or an independent supplier. If a third party supplies the goods, a promise from the franchise manager is no substitute for that party’s contractual obligations.

Make a list of the documents, noting their dates and versions. Check which takes precedence if they conflict — for example, where the agreement promises a fixed price but the portal’s rules allow it to change after an order has been placed.

2. Define which products must be bought from nominated suppliers

Wording such as ‘all materials must be purchased from recommended suppliers’ leaves too many questions unanswered. A recommendation is not the same as an obligation. Ask for the product range to be divided into items that must be purchased from a specified supplier, items requiring approval and items you are free to source yourself.

For each mandatory item, it is useful to record:

• its name, specifications and acceptable alternatives;
• the supplier and the procedure for replacing them;
• the minimum order quantity and required pack multiples;
• the delivery lead time and minimum remaining shelf life;
• the documents confirming quality and compliance with mandatory requirements.

Find out whether the restriction applies only to core raw materials or also to packaging, staff uniforms and consumables. The broader the list, the more important it is to assess its impact on day-to-day costs.

Discuss seasonal products and new launches separately. An obligation to stock a product should not quietly become an obligation to buy unlimited quantities. Suggest agreeing the initial order based on storage capacity and proven demand, rather than solely on targets for the network as a whole.

3. Calculate the full cost of getting goods to your outlet

The supplier’s price list covers only part of the expense. To compare offers, calculate the cost of the goods once delivered and prepared for sale. This may include transport, unloading, storage, mandatory labelling and losses caused by damage or expiry. For cross-border supplies, clarify the applicable customs procedures and tax obligations separately.

Ask for a sample order for an outlet of your type. Check whether prices include taxes, which currency they are quoted in and how the amount payable is calculated. If pricing is linked to an exchange rate, the agreement should clearly identify the rate source and the conversion date.

Pay particular attention to price changes:

• when the new price takes effect;
• how much notice you receive;
• whether the price of a confirmed order remains unchanged;
• whether you can cancel an unconfirmed purchase without penalty.

Then recalculate your margin assuming higher raw material costs and lower sales. This is not a forecast but a stress test of the terms. If you cannot sell the minimum order quantity before the goods expire, a volume discount may prove more expensive than a smaller purchase.

4. Agree what happens when supplies are disrupted or goods are defective

A ban on buying elsewhere is particularly risky if the main supplier does not guarantee delivery times. Ask for a procedure allowing temporary purchases from alternative sources: the circumstances that trigger it, how notice must be given, the requirements for substitute products and the franchisor’s response deadline. Do not treat silence as approval unless the agreement expressly provides for this.

Discuss specific scenarios: an essential item is out of stock, a delivery is delayed or a batch arrives with defects. For each, establish who makes the decision and which documents are required. Acceptance of quantities and checks for hidden defects should not be reduced to a single step — a signature from a driver or warehouse employee.

The supply agreement should set out how discrepancies are recorded, notification deadlines, arrangements for replacing goods or refunding payments, and responsibility for return transport costs. Agree liability for late delivery separately. Do not assume that the franchisor will automatically compensate you for losses caused by an independent supplier’s failure to meet its obligations.

5. Test the documents with a sample order

Before signing, suggest walking through a hypothetical order from the initial request through to sale. Ask the brand’s representatives to show when the obligation to pay arises, how stock availability is confirmed and what happens if only part of the order is dispatched. This exercise quickly reveals gaps between the sales presentation and the agreement.

Summarise the results in a table: product, mandatory supplier, total cost, minimum order quantity, delivery lead time, permitted substitute and liability. Give this to a lawyer alongside the franchise agreement and draft supply agreement: these documents should be assessed together.

Practical takeaway: agree to mandatory purchasing only after checking the entire supply chain. You need more than access to goods and a promised discount: you need clear prices, manageable order volumes and a contractual procedure for dealing with disruptions.