Franchising in Belarus: who pays for gift vouchers?

A customer brings in a gift voucher issued by the network, and your outlet supplies the goods. Who received the money when the voucher was sold, and when will you be paid? This question is easy to overlook before buying a franchise. A shared brand helps franchisees attract customers, but it does not mean that separate businesses share a till. That is why you need to review the voucher rules before signing the agreement, rather than after the first payment dispute.

1. Distinguish between the brand, the voucher seller and the business fulfilling it

Start with a simple request: ask the franchisor to trace a single voucher from payment through to the supply of goods or services. You need both the customer-facing terms and the internal settlement arrangements between members of the network.

Find out which legal entity or individual entrepreneur:

• sells the voucher and takes payment;
• is named on the proof of purchase;
• undertakes to provide the goods or services;
• handles refund requests;
• reimburses the outlet that serves the voucher holder.

These roles may belong to different businesses. For example, the head office company may sell a voucher through its website, while an independent franchisee accepts it. Displaying the same logo does not, in itself, explain the basis on which a franchisee must fulfil another business’s obligation or receive compensation for doing so.

Ask to see a sample voucher, its published terms of use, an example of payment confirmation and a draft settlement agreement. Compare the names of the parties across all these documents. If advertising promises that vouchers can be used ‘at any outlet’, but the agreement only allows you to accept vouchers you have issued yourself, that inconsistency needs to be resolved in advance.

Also clarify whether a new outlet will have to accept vouchers sold before it opened. There must be a clear source of reimbursement for this obligation, rather than a promise of future customer traffic.

2. Check Belarusian rules and the limits of the agreement

Belarus has no standalone franchising law, but specific provisions appear in Chapter 53 of the Civil Code, ‘Comprehensive Business Licence (Franchising)’. Article 910 defines this type of agreement. It must be made in writing and registered with the National Centre of Intellectual Property. Registering the franchise agreement does not, in itself, remove the need to agree on voucher obligations.

Gift vouchers are also subject to the Civil Code’s general provisions on obligations, the Republic of Belarus Law ‘On Consumer Protection’, and the Regulations on the Procedure and Conditions for the Sale of Goods (Performance of Work, Provision of Services) Using Gift Vouchers, approved by Resolution No. 935 of the Council of Ministers of the Republic of Belarus dated 22 December 2018. Before launching, check the current version of these rules as they apply to your retail or service business.

Internal cost-sharing arrangements must not override customers’ rights. Saying ‘the franchisor has not transferred the money yet’ is not a blanket justification for refusing to honour a voucher. First establish which business has undertaken which obligations towards the holder, then address settlement within the network separately.

Ask a Belarusian lawyer to check the published terms against mandatory requirements covering validity periods, remaining balances, top-up payments, refunds and the procedure for making claims. Do not simply copy a foreign network’s terms into Belarusian documents. Wording that is standard in another market may not work here.

3. Agree on reimbursement before joining the scheme

The main financial question is not the voucher’s face value, but how much your outlet will receive after serving the customer. Ask for calculations using several hypothetical examples: full redemption, partial redemption, a purchase requiring an additional payment, and a product return. This is a test of how the scheme works, not a sales forecast.

Set out the following in the agreement or an agreed schedule:

• Basis of reimbursement. The face value, the actual purchase value or another clearly defined amount.
• Deductions. Sales commissions, scheme administration fees and any other agreed costs.
• Payment deadline. A specific period after the transaction or the close of the settlement register, rather than ‘as processing allows’.
• Proof of the transaction. The information needed to show that the voucher was accepted and the obligation fulfilled.
• Error correction. Who investigates discrepancies and when the undisputed portion will be paid.
• Late payment. The consequences of delays and the procedure for settling outstanding amounts.

Pay particular attention to vouchers sold at a discount. If the head office company received less than the face value, who funds the difference? Participation in a promotion should not quietly become an obligation for the franchisee to supply goods at its own expense.

Separately, work through the transaction documentation, tax implications and treatment of these amounts when calculating payments to the franchisor with an accountant. Receiving money, supplying goods and receiving reimbursement within the network are distinct events; do not assume, without checking, that they all represent the same revenue.

4. Test difficult scenarios before the first sale

Ask for a demonstration of the scheme using test transactions. Check whether the cashier can see the remaining balance, whether duplicate deductions are prevented and whether the transaction history can be retrieved. Establish a procedure for system outages: who confirms that a voucher is valid, and what staff are authorised to do.

Work through several scenarios: a voucher issued by another outlet, a damaged code, partial redemption, a product return and the closure of the franchisee that sold the voucher. Each needs a responsible party, a documented basis for the decision and a source of funding. A verbal assurance that ‘head office will sort it out’ is no substitute for a procedure.

Request an anonymised sample settlement report. It should allow you to trace the transaction, the amount deducted from the voucher, any fees withheld, the amount payable to the outlet and the payment status. Then speak to existing franchisees specifically about whether reimbursement deadlines are met, rather than the scheme’s general popularity.

Practical takeaway: join a network-wide gift voucher scheme only once three things are clear: your obligation to the customer, the amount you will be reimbursed and when you will receive it. All three should be supported by documents agreed before you buy the franchise.