Franchising in Belarus: How to Protect Your Territory

When buying a franchise in Belarus, an entrepreneur expects not only a recognisable brand but also a sufficient flow of customers. Yet a promise that “you will be our only partner in the city” does not always protect you from a nearby outlet or deliveries by the same network. A lasting franchise partnership starts with clear rules. Here is how to secure territorial protection before paying any money or signing a lease.

1. Distinguish between your operating territory and exclusivity

In Belarus, franchising is specifically regulated by the Civil Code, which includes a chapter entitled “Comprehensive Business Licence (Franchising)”. Article 910 defines the contractual framework, while Article 910-5 allows contractual restrictions on the parties’ activities, including non-compete obligations. The absence of a separate law entitled “On Franchising” does not mean there are no specific rules.

However, specifying a territory does not, in itself, grant exclusivity. Wording such as “the franchisee operates in Minsk” may simply define where the granted rights can be exercised. It does not necessarily prevent the franchisor from opening its own outlet or appointing another partner nearby.

Check exactly which commitments the franchisor is making:

• not to grant equivalent rights to other franchisees within the agreed territory;
• not to carry out similar activities there itself;
• not to open outlets in other formats that could compete with yours;
• to comply with the agreed allocation of orders placed remotely.

These are separate issues, so grouping them under the single label “exclusive” is risky. Ask a lawyer to review the restrictions in light of Article 910-5 and competition law requirements. In particular, territorial protection must not simply be turned into a ban on serving customers from other areas: terms restricting customers by their location or place of residence need careful scrutiny against statutory prohibitions.

2. Define the boundaries and sales channels

A good territorial description allows two independent readers to identify the same boundaries. “The city centre”, “the station area” and “the area near the shopping centre” do not meet that standard.

Use a schedule containing a map and a written description, based on streets, addresses, administrative boundaries or coordinates. Specify which takes precedence if the two differ. If protection is based on a radius, define the starting point and how distance is measured.

Next, draw up a table of sales channels. For each one, record who may operate within the territory and how orders are allocated and accounted for:

• permanent shops, cafés or offices;
• kiosks, pop-ups and mobile outlets;
• the franchisor’s online shop;
• deliveries by neighbouring franchisees;
• aggregators and online marketplaces;
• direct sales to corporate customers.

For example, a ban on opening a second café does not resolve the issue of deliveries from a neighbouring district. Agree how enquiries through the shared website will be allocated, who pays for promotion and who receives the revenue. If territorial protection does not extend to online sales, this should be clear before you buy, not after you launch.

List any exceptions separately: existing outlets, openings already approved and national corporate contracts. Each exception needs clear limits; otherwise, it could effectively negate all the protection.

3. Check the conditions for retaining protection

Exclusivity often depends on opening an outlet on time, meeting sales targets or developing several locations. These conditions can affect your investment just as much as the initial franchise fee.

Request a consolidated list of the performance measures that determine whether you retain your territory. For each, specify the data source, assessment period and procedure for resolving disagreements. A revenue target that does not explain how returns, discounts and remote sales are treated leaves too much room for dispute.

The circumstances in which protection can be lost must be predictable. During negotiations, propose including:

• written notice of any breach;
• a period to remedy it, where it can be remedied;
• a procedure for taking account of delays caused by the franchisor’s actions;
• a ban on unilateral changes to boundaries and performance measures, unless the parties have agreed another legally permissible mechanism;
• the consequences of relocating or temporarily closing your outlet.

Do not commit to opening additional outlets without a separate funding assessment. Territorial protection does not offset the cost of premises, staff and working capital.

Ask for details of the network’s existing and planned outlets, as well as written confirmation of any overlapping territorial commitments known to the franchisor. Speak to existing franchisees about how the network handles disputes over deliveries and new openings. This is a practical check on its promises, not a substitute for contractual safeguards.

4. Agree the consequences of a breach and formalise the terms

Before signing, work through a specific scenario: an outlet from the same network opens nearby, even though the agreement prohibits it. What must the franchisor do, by when, and what remedies are available to you?

Discuss contractual penalties, the procedure for recovering losses, the possibility of an agreed reduction in fees and grounds for early termination. These mechanisms do not arise automatically from the word “exclusivity”. A Belarusian lawyer should check their wording and applicability. Do not stop paying royalties on your own initiative on the assumption that a breach by the network automatically releases you from your payment obligations.

A comprehensive business licence agreement must be concluded in writing and registered with the patent authority — the National Centre of Intellectual Property. Amendments to the agreement must also be registered. A manager’s promise or a letter extending the territory should therefore not be treated as a proper substitute for formally documenting and registering amendments.

Specify who prepares the documents, pays the registration costs and provides confirmation of registration. Before making a payment, separately agree what happens if registration is refused and how funds will be refunded. Registration is no substitute for assessing whether the territorial terms make commercial sense.

Practical takeaway: before buying, obtain a map of the territory, a list of protected sales channels, the conditions for retaining exclusivity and the consequences of a breach. If any of these elements remains only a verbal promise, do not factor territorial protection into your payback calculations.