Buying a Franchise in Belarus: How to Spot a Contract Mismatch

You are offered a franchise, but the documents sent for signature are a trade mark licence, a consultancy agreement and access to training materials. This is not necessarily a dishonest arrangement, but its legal effect may differ from what you were promised. Trust matters in the franchising community, yet buyers should check one fundamental point: are they receiving a package of rights that allows them to operate their own business, or merely a few separate services?

1. Establish exactly what you are being sold

Belarus has no standalone franchising act, but that does not mean there are no specific rules. Chapter 53 of the Civil Code of the Republic of Belarus, entitled ‘Comprehensive Business Licence (Franchising)’, governs these arrangements. Article 910 defines the relevant contractual structure.

Under such an agreement, the rights holder grants the user a package of licensed rights for business purposes in return for payment. Its mandatory elements are the right to use the rights holder’s business name and undisclosed information. The package may also include trade marks, software, copyright works and other intellectual property. A trade mark often forms part of the offer, but its inclusion alone does not turn a licence into a franchise agreement.

Distinguish between three types of arrangement:

• A licence permits the use of specified intellectual property within defined limits.
• A services agreement requires the provider to carry out specific activities, such as consultancy or training.
• A franchise agreement grants the package of licensed rights prescribed by law for the user to conduct their business.

A standalone licence or consultancy agreement may be entirely lawful and useful. The risk arises when a buyer expects a full franchise, while the documents provide for something substantially narrower. Naming a file ‘Franchise’ or relying on a sales representative’s assurances does not resolve that mismatch.

2. Match promises to legal obligations

Before paying, request the full set of documents at the same time: the main agreement, schedules, separate licences, services agreements and any documents they refer to. Checking only the first page or a single agreement will not give you the full picture.

Create a table with four columns: ‘promise’, ‘document and clause’, ‘responsible party’ and ‘outcome for the buyer’. Add the material terms from the commercial proposal. Do not stop at broad phrases such as ‘turnkey business’ or ‘proven system’ — establish what specific right or action each one entails.

For example, a promise that you can ‘trade under the brand’ should be backed by a defined permission to use the relevant intellectual property, not merely an obligation to send you images of signage. A promise of ‘software access’ should be supported by terms specifying how access is provided, for how long and what uses are permitted. Staff training is no substitute for granting the rights needed to operate the outlet.

Separately, establish who receives the money and who is responsible for delivery. If one company provides the services and another grants the rights, ask how the agreements are linked. Sharing a brand does not automatically make the companies liable for each other’s obligations.

Practical test: can you explain, using the documents alone, exactly what you will be entitled to do after paying? If you have to piece the answer together from correspondence with a sales representative, the package needs further work.

3. Check whether splitting the documents leaves gaps

Using several agreements does not in itself indicate a breach of the law. A separate agreement might, for example, cover additional services. However, splitting the transaction creates a risk: you may have paid under one document without yet receiving an essential right under another.

Consider a hypothetical example. A buyer pays for consultancy because the sales representative describes the payment as an initial franchise fee. The provider holds several meetings and asks the buyer to sign a services acceptance certificate. Meanwhile, the main agreement has still not been agreed. Any resulting dispute may therefore concern the quality of the consultancy rather than delivery of the franchise the buyer expected.

Before signing, establish:

• whether each agreement can be entered into and performed independently of the others;
• what happens to payments for services if the package of licensed rights is not granted;
• which documents entitle you to start trading and which merely confirm preparatory work;
• whether an acceptance certificate acknowledges receipt of something that has not actually been provided.

Ask for agreement on how the documents relate to one another, the sequence in which obligations will be performed and the consequences if the main transaction does not go ahead. These are terms to negotiate, not automatic guarantees of a refund.

Do not accept the claim that simply renaming an agreement removes the need to comply with franchising requirements. Its legal classification depends on the substance of the relationship, not just the heading. If the package effectively provides for the grant of a package of licensed rights, have a Belarusian lawyer check how it should be classified.

4. Agree the legal structure before making the first payment

Article 910-1 of the Civil Code requires a franchise agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property. The registration procedure is set out, among other provisions, in Resolution No. 346 of the Council of Ministers of the Republic of Belarus, dated 21 March 2009. Without the mandatory registration, the agreement is considered invalid.

An assurance such as ‘we will put everything through as services so there is no need to register’ is therefore a reason to pause the transaction and review its structure. Equally, do not assume that every standalone licence is exempt from registration requirements: these depend on the intellectual property concerned and the type of agreement.

Before paying, obtain the final agreed versions of all documents. Record what each agreement covers, how payments are allocated, the conditions for granting rights and what happens if one part of the transaction does not go ahead. Ask a lawyer to assess the package as a whole rather than reviewing the documents in isolation.

Practical takeaway: buy a defined set of rights and obligations, not the label ‘franchise’. If the presentation promises a comprehensive business model, the documents should reflect the transaction you have agreed, rather than leave you with nothing more than consultancy and permission to use a logo.