Franchise Trade Secrets in Belarus: Protection Before the Sale

Established businesses often hold knowledge that underpins their success: production techniques, purchasing terms, capacity planning methods and internal service procedures. Before selling a franchise, it is important not just to bring this information together, but to put safeguards in place. Trust helps people work together in the franchising community, but it is no substitute for access rules. Here is how to prepare trade secrets for sharing with a partner without turning them into a publicly available instruction manual.

1. Separate valuable secrets from ordinary information

Start by taking stock of the information your company uses. There is little point in declaring the entire operations manual confidential: a published menu, outlet addresses and general rules for courteous service do not become trade secrets simply because of a label on the cover.

For each item you may wish to protect, answer four questions:

• What commercial value does it have specifically because it is not known to others?
• Can this information be obtained lawfully from public sources?
• Who currently has access to it, and for what work?
• What practical measures restrict its disclosure?

For example, a publicly available retail price and an internal model for calculating discounts are different categories of information. Similarly, a promotional description of a dish is not the same as a technical recipe sheet containing non-public preparation specifications.

Create a register recording the name of each item, the person responsible for it, its storage location, authorised recipients and the procedure for sharing it. Check where the information came from, too. Documents from an employee’s previous employer or a supplier’s confidential materials cannot automatically be included in your own franchise package.

The result should be a short, clear list of genuinely valuable information, rather than a blanket declaration that everything the company does is secret.

2. Put safeguards in place within your own company

In Belarus, franchise relationships are specifically regulated by the Civil Code, notably the chapter entitled ‘Comprehensive Business Licence (Franchising)’. Article 910 provides for the granting of a package of licensed rights that includes the use of undisclosed information. The Law of the Republic of Belarus No. 16-Z of 5 January 2013 ‘On Trade Secrets’ is also relevant to protecting business secrets.

The practical implication is that a confidentiality agreement is useful, but does not, on its own, replace a formal trade secret protection regime. You need to define the information being protected, the rules for handling it and the people authorised to access it, and document the relevant obligations. Not all information can legally be treated as a trade secret; have your list checked by a Belarusian lawyer.

Before negotiating with your first partner, review your own company:

• Have internal information protection rules been approved?
• Have employees with access been made aware of those rules?
• Are contractors subject to appropriate obligations?
• Are individual user accounts used instead of a shared password?
• Is access revoked when someone leaves or an assignment ends?

If technical recipe sheets are stored in a folder accessible through a public link, contractual wording will not remove that vulnerability. Put your internal practices right first, then extend them to your franchise network.

3. Share information in stages

Prospective franchisees need information to assess your offer, but they do not necessarily need all your production secrets straight away. Prepare several access levels to reflect the stage of the relationship.

Initial introduction. Share a description of the business format, the support package and the broad operating arrangements. Leave out active passwords, non-public recipes and detailed internal calculations unless they are needed for the discussion.

Detailed negotiations. Sign a confidentiality agreement before providing sensitive materials. Define the permitted purpose, authorised recipients, copying restrictions and what happens if negotiations end. If the prospective franchisee brings in an adviser, agree in advance on the terms under which that adviser can gain access.

Operating the franchise. Provide materials according to role: managers should receive the management tools they need, while technical staff should receive the relevant technical instructions. The partner must have enough information to fulfil the agreement, but that does not mean every employee needs unrestricted access to the entire archive.

In Belarus, a franchise agreement must be in writing and registered with the National Centre of Intellectual Property. Under Article 910-1 of the Civil Code, failure to comply with the registration requirement renders the agreement invalid. A separate confidentiality agreement does not replace the franchise agreement or, by itself, grant the right to operate under the brand.

4. Make compliance verifiable

Simply stating that ‘the partner must maintain confidentiality’ is not enough. The contractual documents should specify which categories of information are protected, how shared materials are identified and who is allowed to use them. Agree how long the obligations will last, including after the relationship ends, taking account of applicable law.

Set out practical procedures for:

• recording the transfer of materials and their version numbers;
• granting access to the partner’s employees and contractors only where the necessary obligations are in place;
• reporting lost storage media, information sent to the wrong recipient or unauthorised access;
• blocking user accounts and preserving incident records;
• returning or deleting copies, subject to statutory document retention requirements.

Do not promise that any sum specified in the contract will automatically be recoverable: the grounds for liability, evidence of a breach and enforceability of contractual penalties require legal review. For effective protection, keep evidence of material transfers and access logs, not just signed undertakings.

Carry out a brief check before selling the franchise: ask the responsible employee to show you where a particular secret document is stored, who has opened it and how access can be revoked. If finding the answers takes a long time, the system is not yet ready.

Practical takeaway: preparing trade secrets for a franchise starts with getting your own house in order. Identify valuable information, establish a protection regime and grant access on a need-to-know basis. This will make the partner’s obligations both achievable and verifiable.