Franchise Supply Chains in Belarus: Checks Before Launch

A successful company-owned outlet does not, on its own, prove that its supply chain can support independent partners. A supplier may offer a discount personally to the owner, deliver only within Minsk, or supply small batches without guaranteeing repeat orders. Before building a franchise network, answer one specific question: will a future franchisee be able to obtain the goods and materials they need on clear, repeatable terms?

1. Identify the purchases the business model depends on

Start with a list of essential resources, rather than supplier contacts. For a café, these might be core ingredients and packaging; for a service business, consumables and spare parts; for a shop, the product range that keeps customers coming back.

Divide purchases into three groups:

• Critical to the outcome: substitutions affect product quality, safety or the brand promise.
• Important for presentation: equivalents are acceptable if they meet the agreed specifications.
• General operating supplies: partners can purchase these independently, subject to general requirements.

For each critical item, specify its characteristics, shelf life or service life, minimum order quantity, lead time and acceptable substitutes. An instruction to ‘buy high-quality raw materials’ is of no use: partners need verifiable specifications and, where required, documents confirming compliance.

Separately flag any items currently sourced through the owner's personal arrangements. If the terms cannot be confirmed and extended to an independent buyer, they cannot be treated as a ready-to-use part of the franchise.

2. Check whether an independent partner can access the same terms

Discuss supplying separate legal entities or individual entrepreneurs with your suppliers, rather than talking vaguely about network expansion. A discount offered to your company does not mean a new franchisee with no purchasing history will receive the same rate.

Ask suppliers to set out the following in writing:

• delivery areas and route restrictions;
• minimum order value and required pack multiples;
• payment procedures, availability of credit terms and grounds for changing them;
• order preparation times, procedures for returning defective goods and handling claims;
• supply capacity as new customers join.

Compare these commitments with actual order fulfilment. Check how the supplier reports out-of-stock items, whether it allows partial deliveries and whether it substitutes products without approval. Details like these often disrupt an outlet's operations.

It is worth requesting a delivery quote for the town or city where the proposed outlet will open. This tests whether supply is viable; it is not a promise to a future partner that prices will remain unchanged. Record the quote date and how long the terms remain valid, so that an expired discount does not find its way into your financial projections.

3. Calculate the cost of getting goods onto the shelf, not just out of the warehouse

For a franchisee, purchasing costs include more than the supplier's price: delivery, unloading, storage, losses, returns and cash tied up in stock all count. Check the tax implications of the chosen arrangement separately with an accountant.

Compare two models. Under direct purchasing, the partner contracts with the supplier independently. Under centralised purchasing, your company buys goods and resells them to partners. The second model offers greater scope for coordination, but also gives you additional warehousing, financial and contractual obligations.

For each model, calculate the outlet's working capital requirement: how much must be paid before the goods are sold, and when the next order will be needed. A substantial discount may not be worthwhile if the minimum order exceeds a sensible stockholding.

Test adverse scenarios: falling sales, delivery delays, higher purchase prices and mandatory payment in advance. Do not insert arbitrary percentages simply to make a spreadsheet look convincing. Use suppliers' actual terms and explain your assumptions. If an ordinary change in logistics wipes out profit, revise the product range or purchasing model first.

4. Distinguish the franchise agreement from supply obligations

In Belarus, franchising is specifically regulated by the Civil Code, although there is no separate franchising act. Article 910 defines the comprehensive business licence agreement, while Article 910-1 requires the agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property.

However, granting the package of licensed rights does not, in itself, replace arrangements for selling and delivering goods. Supply arrangements must be documented with regard to the Civil Code's general provisions on sale and purchase and supply contracts. If your company is the seller, clearly define the obligations it assumes. If a third-party supplier sells the goods, do not make promises on its behalf about availability, prices or lead times without an appropriate basis.

Work through the following questions with a lawyer:

• which items must be purchased to specified standards;
• how an alternative supplier can be approved;
• who accepts deliveries and submits claims;
• how costs are allocated in cases of defective goods or incorrectly fulfilled orders;
• what happens when an agreed product is temporarily unavailable.

Quality requirements should not automatically become an unconditional ban on all alternatives. Mandatory purchasing from a particular party and other restrictions require a separate review for compliance with Belarusian civil and competition law.

5. Prepare a backup supply route

For each critical item, define how long the business can operate without it and what to do if a delivery fails. A backup supplier is not ready simply because you have found its phone number: its samples, documentation, prices and delivery capability must all have been checked.

Assign responsibility for approving substitutions. Partners should know whom to notify about a problem, what information to provide and what to do while awaiting a response. For safety-related goods, neither cost savings nor urgency justifies an unverified substitute.

Practical takeaway: before selling a franchise, compile a map of critical purchases, confirmed supplier terms, a full supply cost calculation and backup options. A franchise network is more resilient when product availability rests on clear arrangements rather than a personal phone call from the founder.