Franchising in Belarus: how to check mandatory purchasing requirements

Having to buy from designated suppliers can help maintain consistent quality, but it also makes franchisees dependent on someone else’s prices, stock levels and logistics. When joining a franchise network in Belarus, check not only how appealing the product is, but also whether you can obtain it regularly on clear terms. Below is a step-by-step guide to checking purchasing obligations before buying a franchise.

1. Find out exactly what you will have to buy

Ask the franchisor for a complete list of mandatory purchases. This may include raw materials, finished products, packaging, equipment, consumables, staff uniforms and even cleaning products. Clarify which items are needed only when opening and which you will have to order regularly.

For each item, record:

• the designated supplier and its legal name;
• acceptable alternatives and quality requirements;
• the minimum order quantity and ordering frequency;
• the shelf life or useful life;
• the usual delivery time to your town or city;
• the document that requires you to buy from that particular supplier.

Distinguish between requirements relating to product specifications and those relating to the choice of supplier. For example, a specified packaging density does not necessarily mean that only one supplier can produce suitable packaging. Ask what justifies the exclusive purchasing requirement: a unique recipe, quality control or a commercial arrangement within the network.

Read references to standards and internal instructions particularly carefully. If the list of mandatory products appears only in a manual that can be amended, establish whether the franchisor can expand it without your consent. Prospective franchisees need to understand both the current requirements and the procedure for changing them in future.

2. Check the supplier and the true cost of an order

Obtain a draft supply agreement, an up-to-date specification and a sample calculation of delivery costs to your premises. The purchase price quoted in a sales presentation does not tell you what the goods will cost after transport, unloading, storage and potential write-offs.

Compare offers on a like-for-like basis: the same specifications, order quantities, payment terms, tax treatment and handover location. A low unit price may not represent good value if the supplier requires you to buy more stock than you can sell before it expires.

Check the supplier’s registration, the signatory’s authority and the conformity documents required for the specific products. For imported goods, establish who acts as the importer, arranges clearance and is responsible for the documentation. If the products are subject to mandatory conformity assessment, ask for documents covering the actual goods on offer, rather than a general certificate ‘for the brand’.

Ask existing franchisees about their recent orders rather than the network’s reliability in general: did deliveries arrive when promised, were any quantities missing, and how were defective goods replaced? Anonymised delivery notes and complaints shared with their owners’ permission are more useful than a general assurance that there are usually no problems.

3. Agree on price changes and payment terms

Ask for an explanation of how purchase prices can change. Who approves a new price list? How much notice is given? Does the agreed price remain valid for orders already accepted? Can the supplier demand an additional payment after receiving an advance?

Do not settle for a promise of ‘partner prices’. The phrase has little practical value without a clear calculation method or an approved price list. If volume discounts are offered, clarify how returns and cancelled orders affect them, and when the discount is applied.

Check the pricing currency and payment currency separately. For cross-border supplies, payment arrangements must comply with the applicable Belarusian foreign exchange requirements; ask a bank and a lawyer to check whether the proposed arrangement is permitted.

Request a cost calculation for a typical order, then recalculate it assuming a higher purchase price, a larger minimum order and a delivery delay. This is not a forecast, but a test of how dependent the business is on the supplier’s terms. If a small change makes sales unprofitable, you need to negotiate the terms rather than hope for future discounts.

4. Provide for alternatives if supplies are disrupted

The most dangerous combination is a ban on buying from other suppliers with no corresponding obligation on the main supplier to provide the goods. In that situation, the franchisee risks both having to stop selling and breaching the network’s standards.

Before signing, agree on a backup purchasing procedure:

1. Which events allow you to seek an alternative: late delivery, unavailable stock or repeated defects.
2. How to notify the franchisor and provide evidence of the problem.
3. Which documents and samples are needed to approve an alternative product.
4. How long the franchisor has to review the request.
5. What to do if no response is received.

Do not automatically treat the franchisor’s silence as permission: the consequences must be expressly agreed and legally reviewed. Also establish procedures for accepting deliveries, recording defects, returning goods and recovering reasonable costs. Transport conditions and deadlines for making claims are particularly important for perishable products.

5. Align purchasing terms with the Belarusian franchise agreement

Belarus has no standalone franchising law, but its Civil Code contains specific provisions: the agreement is known as a ‘comprehensive business licence agreement (franchising)’. Article 910 defines its subject matter, while Article 910-1 requires it to be in writing and registered with the patent authority — the National Centre of Intellectual Property.

Article 910-4 sets out the user’s obligations concerning quality and compliance with the rights holder’s relevant instructions. However, this does not mean that every ban on alternative purchasing is automatically justified. Restrictions should be assessed in light of the agreement, Article 910-5 and legislation on counteracting monopolistic activity and promoting competition.

Obligations relating to specific supplies are also governed by the Civil Code’s provisions on sale and purchase and supply contracts. If the seller and the franchisor are separate organisations, a promise by the franchisor does not, by itself, impose an obligation on the seller. Delivery times, quality, liability and backup purchasing arrangements must be agreed between the relevant parties, without contradictions between the documents.

Practical takeaway: before paying for a franchise, obtain the list of mandatory purchases, a draft supply agreement and a written procedure for switching suppliers. Check not only whether goods are available today, but also what options you will have if prices rise, products are defective or supplies are disrupted.