Franchising in Belarus: how to agree on dispute resolution

Dispute resolution provisions are easy to overlook when buying a franchise: attention usually centres on the brand, premises and financial viability of the outlet. Yet this section determines how accessible it will be to enforce your rights. In the franchising community, trust needs to be backed by a clear procedure: whom to notify of a breach, how long to wait for a response and where to turn if no agreement is reached.

1. Distinguish between governing law and the forum for disputes

In Belarus, franchise relationships are specifically governed by Chapter 53 of the Civil Code, entitled ‘Comprehensive Business Licence (Franchising)’. Article 910 defines this type of agreement, while Article 910-1 requires it to be in writing and registered with the patent authority. Registration is handled by the National Centre of Intellectual Property (NCIP). There is no separate franchising act, but that does not mean there are no specific rules.

For a prospective franchisee, three separate questions matter:

• Governing law: which country’s laws govern the contractual relationship.
• Dispute resolution forum: a state court or arbitration agreed by the parties.
• Location and language of proceedings: where the proceedings will take place and in which language documents must be prepared.

These provisions do not replace one another. For example, a reference to Belarusian law does not, by itself, identify a particular court. Nor does choosing foreign law automatically allow the parties to disregard Belarus’s mandatory requirements for business activities and the use of intellectual property within its territory.

If the franchisor proposes an international contract template, ask a Belarusian lawyer to review the arrangements as a whole. A particularly risky situation arises when the main agreement directs the parties to one forum while the payment schedule directs them to another. Any dispute may then begin not with the breach itself, but with an argument over who has jurisdiction to hear it.

2. Make the pre-action claims procedure workable

The phrase ‘all disagreements shall be resolved through negotiation’ does not explain what to do if no response is received. The agreement needs a workable procedure for submitting and considering formal claims, consistent with the applicable procedural requirements.

Propose that it specify:

• postal and email addresses for legally effective notices;
• permitted methods of delivery and confirmation of receipt;
• the required contents of a formal claim and its supporting documents;
• the response deadline and when that period starts;
• the procedure for notifying changes to contact details.

Do not confuse a technical support request with a formal legal claim. A message to a manager about software that is not working may help restore access, but it will not necessarily demonstrate compliance with the pre-action claims procedure. It is useful to define separately when a support request counts as formal notice of a breach.

Also check that the procedure has not become an endless chain of escalation. Mandatory meetings with a regional representative, then a director and then a franchise network committee, with no final deadlines, make it harder to enforce your rights. Each stage should have clear limits, after which you can move on.

Make practical provision for a failure to respond. Silence from the franchisor should not leave the franchisee uncertain about the next step. However, any contractual wording on the consequences of silence must be checked for compliance with the law.

3. Assess the cost implications of the court jurisdiction or arbitration clause

A commercial dispute may be heard by a state court or, where there is a valid arbitration agreement and the dispute is eligible for arbitration, by an arbitral tribunal. In Belarus, one option is the International Arbitration Court at the Belarusian Chamber of Commerce and Industry.

Arbitration is not simply another name for a state court. It has its own rules, fees and procedures for appointing arbitrators. It should not be assumed to be cheaper, faster or more convenient: that assessment depends on the particular institution, the value of the claim and the circumstances of the case.

Before signing, ask a lawyer to work through the clause using a likely dispute as an example: the franchisor has failed to fulfil a contractual obligation, and you are seeking compensation for documented losses. Clarify:

• which upfront fees will be payable to bring a claim;
• whether translations and foreign legal representatives will be needed;
• whether remote hearings are possible;
• where the other party’s assets are located and how a judgment or award could be enforced;
• how legal representation and proceedings costs are allocated.

Pay particular attention to provisions allowing one party to choose between several forums while restricting the other to a single option. Their validity requires a separate legal assessment, and their practical consequences should be discussed during negotiations.

The exact name of the arbitral institution and the clause’s compatibility with its rules matter more than impressive wording about ‘international arbitration’.

4. Secure access to evidence in advance

Even a convenient procedure is of little help if the franchisee cannot prove a breach. Before buying, establish which documents and records you will retain: signed schedules, acceptance certificates, invoices, support requests, responses from the franchisor and reports from the network’s systems.

Agree on your ability to retain documents relating to the performance of the agreement and export your own reports. This is especially important where all correspondence takes place through an online account controlled by the franchisor. When retaining materials, you must comply with requirements concerning personal data, confidentiality and rights relating to information.

Adopt an internal rule: confirm significant points agreed during calls in writing, and document changes to obligations in the proper form. Correspondence may serve as evidence, but it does not always replace a formally required agreement to amend the contract.

Practical takeaway: before signing, work through a hypothetical dispute from the first notice to enforcement of the judgment or award. If the recipient, deadlines, competent forum, costs or available evidence remain unclear, the arrangements for enforcing your rights still need work.