Franchising in Belarus: who is liable for customer claims?

Trading under the same brand does not mean that head office automatically pays for every customer claim. Before joining a franchise network in Belarus, prospective franchisees should establish who handles complaints, makes decisions and bears the costs. Before buying a franchise, check not only the returns procedure but also the franchisor’s role in resolving claims: a shared brand can conceal different legal obligations.

1. Separate statutory liability from internal network arrangements

Belarus has no standalone franchising law, but these relationships are specifically regulated by its Civil Code. Article 910 provides for a comprehensive business licence agreement, under which the rights holder grants the user a package of licensed rights for business activities in return for payment. Article 910-1 requires the agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property.

Another specific Civil Code rule matters for customer claims: the rights holder bears subsidiary liability for claims against the user concerning inadequate quality of goods, work or services sold, performed or supplied under the franchise agreement. Subsidiary liability is secondary liability: it does not mean that a customer can immediately demand the full amount from head office in every situation. The procedure for bringing claims must be assessed under the law.

For claims against the user in its capacity as a manufacturer of the rights holder’s products, the rights holder and user bear joint and several liability. The principle here is different: the creditor may seek performance from the jointly liable parties together or from any one of them, subject to the applicable rules.

Where the customer is an individual buying goods or services for personal use, the Republic of Belarus Law on Consumer Protection also applies. Internal network rules cannot override mandatory consumer rights. The legal basis for claims by companies and business operators must be established separately.

The key distinction: liability to the customer and the ultimate allocation of costs between the partners are not the same thing. The agreement should regulate the latter without creating misleading expectations about the former.

2. Check who is involved in each sale

Before signing the agreement, ask the franchisor to walk you through several typical transactions at your future outlet. An answer such as ‘the brand handles complaints’ is not enough: you need to understand which legal entity sells the goods, supplies the services or acts as the manufacturer.

For each transaction, draw up a short checklist:

• who is named as the seller or service provider in the customer’s documents;
• who takes payment and processes the order;
• who actually manufactures the goods or carries out the work;
• who keeps the sales records and evidence of fulfilment;
• to whom the customer submits a claim;
• what obligations the franchisor assumes.

Look particularly closely at arrangements involving several parties: an order is placed through a shared website, payment goes to one organisation, and collection takes place at the franchisee’s outlet. The collection point alone does not establish liability. You need the terms of sale and the documents for the specific transaction.

Ask for anonymised examples of resolved complaints. What matters is not promotional testimonials but the sequence of events: the reason for the complaint, the decision, the costs incurred and the franchisor’s involvement. A refusal to provide examples does not prove wrongdoing, but it makes a detailed contractual procedure all the more important.

3. Agree a procedure that does not delay the response to the customer

A blanket statement that ‘all claims must be approved by the franchisor’ is risky if approval takes an unspecified amount of time. Waiting for a response from head office does not, in itself, release the franchisee from its obligations to the consumer.

Propose a clear procedure in the agreement or an appendix. Specify how complaints are passed on, which staff are responsible, what documents are required and the deadlines for internal responses. These deadlines must allow statutory requirements to be met, rather than replace them.

Define separately which decisions the franchisee can make independently. For example, you could agree authority to approve a straightforward refund and a procedure for promptly notifying the franchisor. These are matters for negotiation, not an automatic statutory right to spend head office’s funds.

Set out what happens if the cause of a defect is disputed: who arranges the necessary checks, retains the goods and documents, and liaises with specialists. Do not stipulate in advance that any finding by a member of the brand’s staff is binding on the customer.

It is useful to test the procedure against a hypothetical case: a customer demands a refund, the manager is absent and the brand representative is not responding. If staff do not know who makes the decision or how to record the complaint, the procedure is not yet ready for use.

4. Document how costs are shared between the partners

A customer refund is only one possible cost. Transport, product checks, redoing work and legal support can also generate expenses. Before buying a franchise, establish which of these could fall to your company.

For negotiations, distinguish between the causes of claims: an outlet employee failing to follow instructions, a defect in supplied goods, a flaw in a mandatory operating process, or an inaccurate description in centrally managed advertising. For each cause, agree how the facts will be established and how documented expenses will be reimbursed.

Check whether the agreement requires the franchisor’s prior approval for any reimbursement. Such a condition can create an internal dispute even where the franchisee is already obliged to meet a customer’s lawful claim. There needs to be a procedure for urgent decisions followed by the submission of supporting documents.

Clarify payment deadlines between the parties and what happens if they disagree. Do not assume that costs incurred can automatically be deducted from royalties: ask a lawyer to check separately whether a set-off is permitted under the law and the agreement.

Practical takeaway: before paying for a franchise, prepare a table covering ‘customer claim — responsible party — action — costs’. Review it with a lawyer and document the agreed procedure. A shared brand helps co-operation, but it is no substitute for a clear allocation of liability.