Franchising in Belarus: How to Check Equipment Terms

Equipment supplied under a franchise can look like a ready-made solution: the brand provides a specification, the franchisee pays for the package and opens an outlet. But behind this arrangement lie differing terms on ownership, maintenance and replacement. Common standards help franchise networks replicate a business format, but do not in themselves guarantee reliable equipment or affordable repairs. Before buying, check not just the price of the package, but the full arrangements for using it.

1. Separate the right to operate under the brand from rights to the equipment

In Belarus, franchising relationships are specifically governed by Chapter 53 of the Civil Code. The legal name for the agreement is a ‘comprehensive business licence (franchising) agreement’. Its central purpose is to grant a bundle of rights, not to transfer physical assets. Paying for a franchise therefore does not, in itself, mean that the coffee machine, refrigerator or production line becomes your property.

Equipment may be transferred under the main agreement or under separate sale, supply, lease or finance lease agreements. The relevant civil law provisions for the chosen type of agreement apply. Establish exactly who is acting as the seller, lessor and maintenance provider: the franchisor or another company.

Ask for a table covering each significant item of equipment:

• name, model and included components;
• owner and legal basis on which it is supplied to you;
• document confirming the handover;
• point at which ownership passes to you, if a purchase is intended;
• party responsible for delivery, installation and commissioning;
• return conditions if the equipment is supplied temporarily.

Read offers of equipment ‘included in the package’ or ‘free for the duration of operations’ particularly carefully. Check whether there is a security deposit, usage fee, compulsory purchase requirement or charge for wear and tear. These terms should be set out in the documents, not merely in a presentation caption.

The franchise agreement, amendments to it and its termination must be registered with the National Centre of Intellectual Property under the rules established by Resolution No. 346 of the Council of Ministers of the Republic of Belarus, dated 21 March 2009. However, registration of the franchise agreement does not replace equipment handover documents or confirm the equipment’s technical condition.

2. Check whether the package suits your outlet

A brand specification is not the same as a technical brief for particular premises. Equipment may meet the network’s standards yet require electrical capacity, ventilation or water treatment facilities that the chosen site does not have.

Before ordering, give the specification to a suitably qualified specialist. Ask them to check utility connections, dimensions, loads on the premises, operating conditions and access for bringing the equipment inside. Assess the cost of adapting the premises separately from the cost of the equipment package. Otherwise, inexpensive equipment could entail substantial preparatory work.

Compare the equipment’s capacity with the expected workload. Ask the franchisor what assumptions underpin its recommendation: the product range, number of orders or shift length. This is not a check on promised profits, but a technical assessment of whether the outlet can carry out routine operations without constantly overloading the equipment.

Agree an acceptance procedure. It is useful to provide for checks that all components are present, a test run, recording of defects and handover of operating documentation. Establish who signs the acceptance certificate and which defects prevent final acceptance. For second-hand equipment, also request its repair history and an independent condition assessment.

Do not sign a statement confirming that everything is in full working order simply because the packaging arrived undamaged: delivery and successful commissioning are separate events.

3. Calculate maintenance costs, not just the purchase price

To compare offers, prepare operating budgets covering the same period. Alongside the equipment price, include delivery, installation, commissioning, consumables, scheduled maintenance, diagnostics, spare parts and any temporary replacement equipment. Use figures from service providers’ quotations rather than assuming that the warranty will cover every expense.

Establish separately who provides the warranty and whom to contact if a fault occurs. A brand manager’s promise that ‘we’ll sort everything out’ is not the same as an obligation on the seller or service provider to remedy a defect within an agreed timeframe.

Ask for the following to be set out in writing:

• response times for service requests and technician visits;
• geographical service coverage and travel charges;
• work and parts included in the price;
• conditions for keeping the warranty valid;
• approval procedure for chargeable repairs;
• availability of temporary replacement equipment and the terms on which it is supplied.

For imported equipment, check who arranges the supply of parts to Belarus and which compatible alternatives are permitted. Do not settle for a general assurance that servicing is available: request the provider’s contact details and a draft service agreement.

If the supplier, service company and franchisor are separate entities, agree in advance which issues each will handle. A franchisee should not have to work out during a breakdown who accepts the service request, who pays for diagnostics and who can authorise a component replacement.

4. Agree repair arrangements that do not conflict with brand standards

Chapter 53 of the Civil Code requires the franchisee to follow the franchisor’s relevant instructions and maintain the prescribed quality standards. A technically suitable equipment replacement will therefore not necessarily comply with the terms of a particular franchise.

Before signing, check exactly what is mandatory: a particular model, a manufacturer or a set of technical specifications. If the agreement permits only one model, ask what happens if it is discontinued or spare parts become unavailable.

Propose a formal procedure for approving an equivalent alternative: which documents must be submitted, who makes the decision and how soon they must provide a reasoned response. Separately, establish whether emergency repairs by a local specialist and the temporary use of replacement equipment are permitted. Do not assume that silence automatically means consent unless the agreed procedure expressly provides for this.

It is also useful to distinguish responsibility for incorrect operation, manufacturing defects and installation errors. A brand’s requirement to use particular equipment does not, in itself, make the franchisor responsible for every breakdown: check each party’s obligations.

Practical takeaway: before paying, obtain three agreed documents: an equipment specification, the terms on which it is supplied and a clear servicing procedure. Buying an equipment package is safer when you know not only its price and appearance, but also who owns it, who will repair it and how it may be replaced.