Buying a Franchise in Belarus: How to Check the Seller’s Authority

A franchise presentation may be delivered by the brand’s founder, a manager or an external intermediary. But a persuasive pitch does not establish their authority to enter into an agreement or receive money. When entering the Belarusian franchise market, buyers need to establish exactly who will be taking on contractual obligations towards them. This means checking not only the company’s name, but also the individual signatory’s authority, the role of any intermediaries and the basis for each payment.

1. Establish which company is selling the franchise

Start with a straightforward request: ask for the full legal name of the proposed contracting party, its registration details and address, and a draft agreement with its details filled in. The network’s trading name may differ from the name of the legal entity. That is not unusual in itself, but the relationship between the brand, the seller and the contracting party must be clear.

Check the Belarusian counterparty’s details against the Unified State Register of Legal Entities and Individual Entrepreneurs. Pay attention to the organisation’s status, the accuracy of its name and whether its registration details match. If the contracting party is a foreign entity, request up-to-date evidence of its registration in the relevant country; ask a Belarusian lawyer about translation requirements and any formalities the documents must meet.

Draw up a short table showing:

• who advertised the franchise for sale;
• who is conducting the negotiations;
• who is named as the rights holder in the draft agreement;
• who is issuing the invoice;
• who will receive the money.

Different parties appearing in this table are not automatically a sign of wrongdoing. However, every discrepancy needs an explanation and supporting documents. Saying ‘it is all part of our group of companies’ is not enough: belonging to the same business group does not, in itself, authorise one organisation to act on behalf of another.

Keep the information you obtain, together with the date of the check. Repeat the checks if negotiations drag on or the contracting party changes before signing.

2. Check the individual’s authority to sign

A job title in correspondence, a company email address and a business card are no substitute for evidence of authority. Even someone who introduces themselves as the brand’s owner may not be entitled to sign documents on the company’s behalf. Being a shareholder or member of a company is a different role from being its director.

If the agreement is to be signed by the company’s director, request documents confirming their appointment and details of any restrictions on their authority. Where necessary, a lawyer can review the company’s constitutional documents and determine whether separate corporate approval is required for the transaction. Do not assume that such approval is compulsory for every franchise purchase: this depends on the circumstances and the applicable rules.

If the signatory is acting under a power of attorney, check:

• which organisation issued it and to whom;
• its date, period of validity and whether it has been properly executed;
• which agreements the representative is authorised to enter into;
• whether there are limits on the transaction value or terms;
• whether it covers signing annexes and subsequent agreements.

Check their authority to receive money separately if the representative asks you to pay them or another organisation. Authority to negotiate should not automatically be treated as authority to sign an agreement or accept payment.

To verify this, contact the company using official contact details you have found independently. Ask it to confirm the representative’s involvement in the transaction and that their authority remains valid. This is especially important if the payment details or signatory change immediately before payment.

3. Distinguish the intermediary from the contracting party

An intermediary may introduce the buyer to the brand, arrange meetings and help gather documents. However, their promises do not automatically become obligations of the rights holder. Before buying, establish whom they represent and which actions they are personally responsible for.

Ask for documentary evidence of their role: a power of attorney or another document establishing the basis and scope of their authority to act. If the full agreement with the intermediary contains confidential terms, discuss obtaining a certified extract or separate confirmation of authority from the rights holder.

Examine any proposal to transfer money to an intermediary particularly carefully. You need to understand what the payment is for: the intermediary’s own service, or the discharge of a payment obligation owed to the rights holder. In the latter case, require properly documented grounds for the arrangement and confirmation that the payment will count towards your obligations under the agreement.

For example, a manager sends an invoice from a company that does not appear in the draft agreement. Do not settle for the explanation ‘that is how our accounting works’. Put the transfer on hold and agree on documentation explaining who the recipient is, the basis for the payment and how it will be credited under your agreement. Checking this after the transfer is much harder.

4. Assemble a due diligence file before signing

Belarus has no standalone franchising law, but its Civil Code contains specific rules. Article 910 governs the comprehensive business licence agreement: the provision of a package of licensed rights in return for a fee. Article 910-1 requires the agreement to be in writing and registered with the patent authority, the National Centre of Intellectual Property.

The registration procedure is governed, among other instruments, by Resolution No. 346 of the Council of Ministers of the Republic of Belarus, dated 21 March 2009. Registration is necessary, but it should not be seen as a substitute for your own checks on the counterparty and its representative’s authority. General civil law provisions also apply to representation and entering into the transaction.

Before signing, give your lawyer a complete file: the final draft, annexes, the counterparty’s registration details, documents establishing the signatory’s authority and explanations of any intermediaries’ involvement. Check that the signatory’s name and the basis of their authority are consistent throughout the documents, and that no unexplained recipient appears in the payment details.

Keep the final signed version and the evidence of authority you relied on. Correspondence with a manager or a photograph of the agreement’s last page is no substitute.

Practical takeaway: before paying, identify the contracting party, verify the signatory’s authority and obtain documents explaining the involvement of everyone receiving money. Resolve any discrepancies first, and only then proceed with the transaction.