Franchising in Belarus: who pays when standards change?

Prospective franchisees usually study the requirements for opening a business, but are less likely to ask what happens when those requirements change. At some point, the brand may update its design, replace equipment or move franchisees to a different accounting system. Evolving standards are a natural part of franchising, but the costs and deadlines should be clear from the outset. Here is how someone buying a franchise in Belarus can agree on the rules for such changes before signing the contract.

1. Separate mandatory requirements from the brand’s preferences

Belarus has no standalone franchising law, but its Civil Code contains specific provisions governing franchising. Article 910 defines the comprehensive business licence agreement (franchising), while Article 910-4 sets out the obligations of the licensee, or franchisee. These include following the rights holder’s instructions and directions on the nature, methods and conditions of use of the licensed package, including the design of the premises, and ensuring the appropriate quality of goods, work or services.

This means that standards cannot be treated as optional recommendations. However, an obligation to follow instructions does not automatically determine how updates are to be funded. Who pays, when the work must be completed and how a transition period is agreed are matters that need to be addressed separately in the contract.

Ask the franchisor to divide its requirements into three groups:

• mandatory at the time of opening;
• mandatory when a specified event occurs, such as the replacement of worn-out equipment;
• recommended improvements that the franchisee may introduce voluntarily.

Identify changes needed to comply with the law separately. Contractual extensions do not exempt a business from mandatory safety requirements or other applicable rules. Equally, a commercial decision by the brand to update an interior should not be confused with a change in the law: the grounds for the change and the implementation process are different.

2. Record the baseline version of the standards

A clause stating that ‘the franchisee must comply with all current network standards’ does not tell the buyer the extent of their future obligations. The risk is particularly high if documents are available only through an online account and the franchisor can replace them without retaining earlier versions.

Before making any payment, request a list of the documents that set the requirements for your outlet: the design manual, equipment specifications, software usage rules, and requirements for packaging and operating procedures. Record the titles, dates and versions of these documents in the contract or a schedule. Also specify how receipt of the documents will be confirmed.

For each document, establish:

• whether the franchisor may amend it unilaterally;
• which changes require a supplementary agreement;
• how notice will be given;
• when the compliance period begins;
• where earlier versions will be stored.

Ask to see the update history for whatever period is available. This is not intended to predict exact costs, but to help you understand the brand’s approach: does it replace individual elements or regularly require a complete refit? Speak to existing franchisees about whether they received advance cost estimates and whether their recent investments were taken into account.

Clarify whether the requirements are the same for new and existing outlets. A new design may be mandatory for new openings but introduced gradually at existing sites. If this approach is promised during negotiations, put it in the contract: a verbal assurance is not enough.

3. Agree on the procedure and allocation of costs

Rather than discussing the brand’s abstract right to develop, focus on a specific process: notice, justification, cost assessment, a transition plan and confirmation of completion. For costly updates, propose a written description of the changes, including technical requirements and a list of the processes affected.

The estimate should cover more than the purchase of equipment. It may also need to include delivery, installation, removal, software configuration, staff training, disposal of old materials and outlet downtime. If these items are omitted from the initial estimate, the final financial burden will be greater than expected.

Discuss the following contractual mechanisms:

• Transition period. Time to order, receive and implement the changes without disrupting the outlet’s operations.
• Protection for recent investments. Deferral of the replacement of serviceable equipment previously approved in writing by the franchisor.
• Additional cost threshold. An amount, or a method of calculation, above which separate agreement is required.
• Franchisor contribution. Reimbursement of part of the costs, provision of equipment or other expressly agreed support.
• Pilot implementation. Testing the solution at a few outlets before extending the requirement to all franchisees.

These are matters for negotiation, not benefits automatically granted by law. Any limit on expenditure must be consistent with the franchisee’s mandatory obligations. A lawyer should check how the proposed procedure fits with the rest of the contract and whether the relevant contract amendments need to be registered with Belarus’s National Centre of Intellectual Property (NCIP).

4. Test the contract against a sample scenario

Put a hypothetical situation to the franchisor: the outlet has recently opened and its equipment is working properly, but the brand requires it to be replaced while also introducing new software. Ask the franchisor to explain what happens next by referring to the relevant contract clauses.

Who sends the notice? Must the technical need for replacement be demonstrated? Is compatible equipment permitted? Who pays for data migration and training? What happens if delivery is delayed through no fault of the franchisee? Can the outlet continue operating under the previous version of the standard until the agreed transition is complete?

The procedure for considering objections is particularly important. Propose a deadline for the franchisor’s response and a process for agreeing on an alternative solution. Submitting an objection does not, in itself, automatically suspend the obligation to comply: this needs to be addressed separately, within the limits permitted by law.

Keep the agreed versions of the documents and correspondence with authorised representatives. If a manager’s answers conflict with the contract, rely not on a promise that ‘we always work things out’, but on an amended text.

Practical takeaway: before buying a franchise, record the baseline standards, the procedure for updating them and the allocation of costs. Clear rules allow franchisors and franchisees to develop the brand without turning every change into a financial dispute.