The Scope of a Franchise Agreement in Belarus: Defining the Business Model

An established business often has several revenue streams: serving customers on site, delivery, off-site services and sales of related products. You do not have to offer all of them to a franchise partner. Before selling your first franchise, define exactly which model the partner will be allowed to use. Clear boundaries underpin predictable franchise relationships: the franchisor understands the extent of the rights granted, while the partner understands what their business can do.

1. Separate the franchise from the company’s full range of services

Start not with legal wording, but with a list of how your company earns its revenue. For each business activity, identify the product, sales method, resources required and reliance on the owner. Then select the activities you intend to make available to franchisees.

For example, a company-owned bakery may serve customers, supply businesses and take orders for special-occasion baked goods. Yet the franchise offer may cover only a retail outlet with on-site baking. Business-to-business supplies and bespoke orders should not automatically fall within the promise of a ‘ready-made business’.

Draw up a short profile of the format being offered:

• which goods or services the partner will offer;
• which operations they will carry out themselves;
• which channels they will use to take orders;
• which additional activities fall outside the agreement;
• which actions require separate approval.

This is neither a description of the territory nor an operations manual. The profile answers a more fundamental question: which business activities you permit the partner to carry out using the package of rights granted.

Test the profile against specific scenarios. Can the partner accept a wholesale order? Set up their own page for online sales? Provide an off-site service under your brand? If the answers depend on the founder’s verbal consent, the boundaries of the offer are not yet clear.

2. Link the format to the licensed package

Belarus has no standalone franchising law, but franchise relationships are specifically governed by Chapter 53 of the Civil Code, entitled ‘Comprehensive Business Licence (Franchising)’. It is therefore wrong to treat a franchise simply as consultancy services or the sale of a set of instructions.

Article 910 of the Civil Code ties the agreement to the grant, for a fee, of a licensed package for use in the franchisee’s business activities. This package comprises the rights and undisclosed information specified by law and may include rights to a trade mark and other intellectual property. The agreement’s subject matter must describe the grant of rights, not merely a promise to help open an outlet.

Prepare a mapping table for your lawyer: ‘business model element — required intellectual property or information — method of use’. For example, fitting out and branding an outlet will require the right to use the relevant branding, while replicating a process will require access to specific undisclosed information. Labelling an appendix ‘all company materials’ does not make clear what the partner actually receives.

Distinguish your own materials from third-party tools. If your company uses subscription software, that does not in itself mean it is entitled to make the software available to franchisees. Access may require the partner to enter into a separate agreement with the supplier.

Belarusian legislation requires the agreement to be in writing and registered with the National Centre of Intellectual Property (NCIP). Article 910¹ of the Civil Code sets out the requirements for form and registration. Precision about the agreement’s scope therefore matters beyond negotiations: the documents must describe a legally formalised grant of rights.

3. Describe permitted use unambiguously

The phrase ‘the partner may operate a business using the franchisor’s system’ is too general for practical purposes. It does not explain which actions are permitted or where the agreed format ends.

In the draft agreement and its appendices, distinguish between three groups of terms:

1. Rights granted. Which elements of the package the franchisee receives and how they may use them.
2. Business activities. Which goods the package may be used to produce or sell, or which services it may be used to provide.
3. Extent of use. How the rights granted relate to the agreed premises, sales channels and scale of the partner’s operations.

Have a Belarusian lawyer review any specific restrictions: freedom of contract does not make every provision permissible. Particular care is needed with terms affecting competition, pricing and the customers the franchisee may serve.

Establish a clear decision-making process for each potentially contentious scenario. For example, a partner wants to add event services. They submit a description of the service, the franchisor assesses its compatibility with the model, and the parties then formally document the agreed decision. Do not replace this process with an open-ended promise to ‘consider the possibility’.

Also specify who may give approval and in what form. A reply from an employee in correspondence should not leave uncertainty about whether the partner’s contractual rights have changed.

4. Align the documents before offering the franchise

Compare the format profile, commercial proposal, draft agreement and list of materials to be supplied. Every document should give the same answer to the question of what the franchise includes.

Run a simple check: ask someone who was not involved in preparing the offer to list the permitted business activities based on these documents. If the presentation promises production and delivery but the agreement covers only retail sales, resolve the discrepancy before negotiating with a prospective franchisee.

Appoint someone to keep the document set up to date. When adding a new activity, check not only the presentation wording but also whether the rights granted are sufficient, what information must be supplied and whether the agreement needs amending. For amendments to a registered agreement, separately confirm the requirements for documenting and registering them with the NCIP.

Practical takeaway: before selling a franchise, set out on one page what the partner is entitled to do, which rights they receive for that purpose and what requires a separate agreement. Then turn that outline into consistent contractual terms, without promising more than the model you are actually making available.