Franchise territories in Belarus: how to set boundaries

When turning an existing business into a franchise, promising that ‘the city will be yours’ may seem an easy way to attract your first partner. But it can block network growth and trigger disputes over deliveries, online orders and new outlets. In franchising, trust is built on clearly defined commitments, not sweeping promises. Here is how a business owner in Belarus can prepare territorial terms before negotiations begin.

1. Define exactly what you are promising your partner

The territory in which the granted rights may be exercised and territorial exclusivity are two different contractual terms. The first defines where the partner may operate under the franchise. The second sets out which activities the franchisor undertakes not to carry out within that territory. One does not automatically imply the other.

Start by deciding what your commitment will cover. For example, you might undertake not to open company-owned premises of a particular format or grant other franchisees an equivalent package of rights within the agreed boundaries. Separately, you should decide how to treat existing outlets, the online shop, temporary retail premises and corporate sales.

For each format, draw up a short summary covering:

• where the partner is permitted to operate;
• restrictions on the franchisor’s company-owned outlets;
• restrictions on appointing other franchisees;
• exceptions for particular sales channels;
• the duration of territorial protection.

Do not describe a territory as exclusive if substantial exceptions allow a virtually identical outlet to open nearby. Your partner needs to understand the commercial substance of the provision, not just its label.

2. Test the boundaries against your business data

Do not divide Belarus into uniform territories based solely on administrative maps. A city district may include residential neighbourhoods, industrial areas and locations with very different levels of customer traffic. Sensible boundaries for a small café will differ from those for a mobile service business.

Use data from your existing business: where customers come from, where deliveries go, how long journeys take and which local facilities generate demand. When analysing customer addresses, comply with personal data processing requirements; anonymised, aggregated data will usually be sufficient for planning.

Test several scenarios: a second outlet opening, a major new retail development or changes to transport routes. The aim is to assess whether the partner can serve the promised territory while leaving room for the network to grow. This assessment should not become a revenue guarantee.

Record the outcome in a schedule to the agreement, with both a map and a written description of the boundaries. Identify streets, plots or administrative areas precisely enough for the territory to be established without verbal explanation. Specify which description takes precedence if they conflict, and what happens if streets are renamed or administrative boundaries change.

3. Address deliveries and digital orders separately

An outlet’s physical address does not determine who receives an order placed through a shared website. Before selling the franchise, draw up a sales channel table covering on-site service, collection, in-house delivery, third-party platforms, corporate contracts and a shared telephone line.

For each channel, define how orders are allocated and payments settled. For example, enquiries through the shared website could be routed according to the delivery address, while collection orders could go to the outlet selected by the customer. These are internal operating rules and must be distinguished from restrictions on customers’ rights.

Work through potential grey areas in advance:

• an order comes from a protected territory, but the partner is temporarily closed;
• a customer chooses a different outlet for collection;
• a corporate customer has addresses in several cities;
• a third-party platform allocates the order independently;
• a customer approaches a neighbouring franchisee directly.

Set out who makes the decision, how the order is recorded and who is responsible to the customer. Do not promise your partner every sale to residents of a particular district: such a commitment is difficult to monitor, and restrictions based on customers’ locations require a separate legal review.

4. Check the terms against Belarusian law

Belarus has no standalone franchising law, but franchise relationships are specifically regulated by its Civil Code. Article 910 defines the comprehensive business licence agreement, the legal form used to grant a package of licensed rights. The Code allows that package to be used with or without a specified territory.

The agreement must be in writing and registered with the National Centre of Intellectual Property. The territorial schedule must be consistent with the main agreement and the scope of the rights granted. Any subsequent changes to the terms must take account of the requirements for documenting and registering amendments.

The freedom to agree territorial arrangements is not unlimited. As well as the Civil Code’s specific provisions on restrictive contractual terms, take account of the Republic of Belarus Law ‘On Counteracting Monopolistic Activity and Promoting Competition’. Do not copy a foreign template into a Belarusian agreement without legal review.

A lawyer should scrutinise provisions concerning competition, pricing and serving only particular categories of customers or customers from a particular territory. Territorial protection for a partner does not mean that any restriction on sales outside that territory is permissible.

5. Establish procedures for expansion and review

If protection depends on developing the territory, define verifiable obligations: deadlines for opening agreed outlets, procedures for confirming readiness and grounds for extending deadlines. Do not replace these with a vague requirement to ‘actively develop the city’.

Provide for notice of a breach, a period to remedy it and clear consequences. Separately, describe the procedures for approving a new outlet, relocating an existing one and resolving a territorial dispute. Boundaries should not change simply through an update to the network’s internal map.

Practical takeaway: before negotiations, prepare a territory map, a sales channel table and a list of territorial protection commitments. Submit them for legal review together: only a consistent set of documents shows exactly what the partner receives and which opportunities the franchisor retains.