Claims Against Franchisees in Belarus: The Franchisor’s Liability

When selling a franchise based on an existing business, the owner gives a partner independent control of an outlet, but does not shed all quality-related risks. Before signing the first agreement, establish a claims-handling process: who receives complaints, who retains documents and how the parties share costs. For franchise networks, this is not just a matter of reputation, but also a way to protect customers without a protracted dispute between partners.

Why a claim against a franchisee concerns the franchisor

In Belarus, franchising is specifically regulated by the Civil Code, although there is no separate franchising law. Article 910 defines the comprehensive business licence agreement, or franchise agreement. Article 910-1 requires the agreement to be in writing and registered with the patent authority. Registration is handled by the National Centre of Intellectual Property (NCIP).

Franchisors must also take account of the liability rule: the rights holder bears subsidiary liability for claims against the franchisee concerning goods, work or services supplied under the franchise agreement that fail to meet quality requirements. Saying that “the franchisee operates independently and is responsible for everything” therefore does not remove this statutory risk.

Subsidiary liability is liability that supplements that of the primary debtor. It does not mean that the franchisor must automatically be the first to pay every customer claim. The grounds for bringing a claim, compliance with the prescribed procedure and the circumstances of each dispute require a separate legal assessment.

Retail sales and services provided to individuals must also comply with the Republic of Belarus Law on Consumer Protection. A network’s internal procedures must not restrict customers’ statutory rights or replace mandatory deadlines with arbitrary timeframes for approval by head office. The terms agreed between the partners do not, in themselves, override the rights of third parties.

Review claims in your own business before selling a franchise

Start not with a legal template, but with the complaints already received by your existing outlets. Gather the available records of returns, remedial work, complaints about service outcomes and disputed refusals to resolve complaints. Separately flag cases where the cause could not be established: these reveal gaps in the evidence you collect.

Prepare a short summary for each common scenario:

• what exactly the customer disputes and what remedy they are seeking;
• which documents confirm the sale or completion of the work;
• what information will help assess quality;
• who can establish the cause of the defect;
• what decisions can be made at the outlet;
• when the franchisor and a lawyer need to be involved.

Distinguish between a product defect, an employee error and general customer dissatisfaction. These situations may call for different responses. However, an employee should not dismiss a complaint as unfounded simply because no similar complaints have been received before.

For example, a dispute about product quality may require details of the batch, supplier and storage conditions. A service complaint may require a description of the agreed outcome, the order and records of the work completed. Collect only the information needed, and comply with personal data legislation when sharing it with the franchisor.

Create a clear complaints process, not a chain of referrals

Internal procedures should answer a simple question: what does a franchisee’s employee do when a complaint arrives? At a minimum, the process should cover recording the complaint, passing it to the responsible person, preserving supporting material, assessing the claim and documenting the outcome. The customer should not have to act as a messenger between the franchisee and the brand owner.

Appoint a lead contact and a deputy for each party. Specify the notification channel, the material to be shared and internal response deadlines. Set those deadlines with enough margin to meet the applicable statutory time limits, rather than treating them as a substitute.

Identify circumstances that require immediate notification of the franchisor: possible harm to health, recurring defects, complaints relating to the same batch or receipt of court documents. Tailor the list to the business. Potentially dangerous situations require a separate procedure for restricting sales or services until the circumstances have been clarified.

Define each party’s authority. Which claims can the franchisee handle independently? Which discretionary compensation payments require approval? Who arranges a quality assessment if one is needed? Do not let approval requirements prevent a lawful customer claim from being met: a lack of response from head office does not release the franchisee from its obligations.

Before launch, run a training exercise based on a disputed claim. Check whether the new manager can follow the entire process without personally calling the owner. The exercise should result in improved instructions, not merely a record that training took place.

Agree on costs and how disputes will be handled

The franchise agreement should require the parties to give timely notice of significant claims, retain documents and assist in establishing the facts. Separately agree how each party will participate in responding to claims and in court proceedings. A lawyer should review the wording against the mandatory liability rules.

It is better to allocate costs according to the established cause of the problem, rather than simply according to who received the complaint first. An error in the franchisor’s mandatory instructions, a franchisee’s failure to follow prescribed procedures and a defect in a supplied product are different grounds for allocating costs between the parties. Do not promise automatic recovery of all costs from the franchisee regardless of the circumstances.

Specify which documents substantiate payments, how discretionary concessions to customers are approved and how the parties will handle disagreements over reimbursement. Keep internal financial disputes separate from the fulfilment of obligations to the customer.

Practical takeaway: before selling your first franchise, map out common claims, appoint responsible staff and agree contractual procedures for working together. A franchisee’s independence is no substitute for a system that quickly identifies the cause of a defect and resolves the customer’s problem lawfully.