Franchise downtime in Belarus: how to agree a temporary closure

An incident at the premises, lengthy repairs or an inability to admit customers may stop an outlet trading, but they do not necessarily suspend the franchise agreement. Before investing, establish what will happen to payments and other obligations during a temporary closure. Mutual support matters in the franchise community, but the financial consequences of downtime are best agreed in writing in advance, rather than left to a network manager’s discretion.

Why closing an outlet does not suspend the agreement

In Belarus, franchising is specifically regulated by the Civil Code, although there is no standalone franchising law. Chapter 53¹ of the Code covers the comprehensive business licence — the legal term used for a franchise agreement. Article 910 provides for a package of licensed rights to be granted to the user in return for a fee, while Article 910-1 requires the agreement to be in writing and registered with the patent authority.

This does not mean that the obligation to pay automatically disappears when a business temporarily stops using the brand. The terms of the individual agreement, the nature of the shutdown and the applicable rules on the performance of obligations all matter.

An analysis of a sub-franchising dispute published on the Belarusian courts’ website illustrates the point. The court rejected the argument that the package of licensed rights had not been used: the agreement required payment regardless of whether those rights were actually exercised. This is not a universal rule for every franchise, but it is a practical warning: having no sales does not, in itself, guarantee relief from charges.

A prospective franchisee should therefore ask not only ‘How much will I pay?’ but also ‘What exactly changes if I am temporarily unable to trade?’ Review the entire agreement: a requirement to operate continuously may appear well outside the section on fees.

Distinguish between the causes and types of downtime

A clause stating that ‘the parties will agree separate arrangements in the event of a temporary closure’ leaves the prospective franchisee without a clear solution in advance. Instead, propose a list of scenarios and a procedure for each.

It makes sense to distinguish between:

• A planned shutdown: agreed refurbishment, maintenance or a seasonal break.
• An external event: a utility failure, damage to the premises or loss of access to the building.
• A problem on the franchisee’s side: staff shortages, failure to meet mandatory requirements or insufficient working capital.
• An issue on the franchisor’s side: an inability to provide an essential element of the licensed package or fulfil an obligation without which the outlet cannot operate.

For each scenario, specify whether prior approval is required, what evidence must be provided and who decides whether contractual relief will be granted. Not every business difficulty amounts to force majeure. Even where force majeure exists, it should not automatically be treated as ending all payment obligations: its legal consequences need to be assessed separately.

Also distinguish between full and partial closure. For example, a dining area may be closed to customers while deliveries continue. Agree whether this counts as downtime and which terms apply to the sales channel that remains operational. Otherwise, the parties may interpret the same situation differently.

Agree the financial arrangements for the closure

Ask the franchisor to show how charges would be calculated both with no sales at all and with partial operations. The aim is not to test the overall financial model, but to examine a specific temporary shutdown scenario.

Draw up a schedule listing the payment obligations: fixed fees, percentage-based payments, advertising contributions, service charges and any other sums payable under the agreement. Against each item, record the agreed effect of downtime: continued accrual, a reduction, a waiver for a specified period or deferred payment.

Deferral is not a payment waiver. If payment is merely postponed, the amount may fall due after reopening alongside ongoing operating costs. Clarify the repayment schedule, whether interest applies and the conditions for charging contractual penalties. Separately check whether a minimum payment remains payable when revenue is zero.

Discuss when the relief period begins and ends. This may depend on the date of the event, receipt of notice or verification of supporting documents — whichever approach is chosen must be expressly recorded. Avoid a situation in which there is a right to reduced payments but no deadline for considering the application.

For example, premises might close following an emergency while the agreement remains in force. The parties could agree in advance to reduce certain charges for a period supported by documentary evidence. That relief must be provided for in the agreement or a properly executed supplementary agreement, rather than assumed by the prospective franchisee.

Set out the notification and reopening procedure

A workable mechanism for temporary closure should answer several questions:

1. Who must be notified of the shutdown, and by what means?
2. What is the notification deadline, and which documents must be attached?
3. By when must the franchisor respond?
4. Which obligations remain in force during the closure?
5. What is required before trading can resume?

Evidence may include an incident report, a notice from the landlord or another document relevant to the event. The requirements should be proportionate to the situation: a franchisee may not be able to obtain a complete set of documents from third parties immediately.

Separately agree the arrangements during the closure for displaying signage, informing customers, maintaining confidentiality and fulfilling orders already accepted. A temporary closure should not give the impression that existing obligations to customers have disappeared.

If a readiness inspection is required before reopening, agree its criteria and the timeframe for carrying it out. Also set a maximum duration for the closure and a procedure for further negotiations. A shutdown should not be mistakenly understood as automatically extending the term of the agreement.

Amendments to franchise agreements must be registered under Resolution No. 346 of the Council of Ministers of the Republic of Belarus, dated 21 March 2009. If the temporary closure arrangements change the terms of the agreement, consult a lawyer in advance about the documentation and registration steps required. Correspondence with a manager should not be treated as a substitute for that procedure.

Practical takeaway: before investing in a franchise, test the scenario ‘the outlet is closed, but the agreement remains in force’. Record the grounds for a temporary closure, the documents required, the treatment of each payment and the conditions for reopening — so that any downtime has clear contractual consequences.