Franchising in Belarus: separating the roles of owner and manager

A successful company-owned outlet is not necessarily ready to operate under an employed manager. Without realising it, the founder may still control purchasing, resolve disputes and approve every discount. When a franchise is sold, this dependence is passed on to the franchisee. To build a sustainable franchise network in Belarus, establish in advance what the franchisee business owner will do, what will be delegated to the manager and which matters will remain with the franchisor.

1. Choose the owner's level of involvement

Before preparing your franchise offer, decide which operating model you can genuinely pass on to a franchisee. Will the owner run the outlet personally or employ a manager? These are two different models, even if the premises, product range and brand are identical.

In the first model, the franchisee combines investment and management responsibilities: drawing up rotas, investigating stock shortages and dealing with suppliers. In the second, they pay someone to do this work and put oversight arrangements in place. You cannot promise the second model if your own business is only stable because the founder is there every day.

List everything you do during a typical working week. Include not just planned tasks, but also quick calls, corrections and urgent approvals. For each activity, record:

• who raised the issue;
• what decision was needed;
• what information was available only to you;
• who could make that decision within the franchisee's business;
• whether it requires funds, access to software or signing authority.

This list reveals the hidden management workload. For example, if only the founder knows which goods can be ordered on deferred payment terms, the problem is not the future manager's lack of independence, but a purchasing procedure that has not been passed on.

2. Allocate decision-making authority, not just duties

Saying that “the manager is responsible for running the outlet” is almost meaningless without giving them authority. An employee may be responsible for keeping goods in stock but unable to approve payment. As a result, the decision still comes back to the owner.

Prepare an authority matrix. For each recurring decision, identify who acts, who approves, the limits of independent authority and what happens if the approver is unavailable. Distinguish between the franchisee's internal decisions and matters of compliance with franchise requirements.

For example, the manager draws up the shift rota within the approved budget. The owner of the franchisee company decides whether to increase the payroll budget. The franchisor explains service requirements but does not become the line manager of the franchisee's employees.

Address exceptional situations separately:

• an employee fails to turn up for a shift;
• the point-of-sale software is unavailable;
• a supplier demands an urgent advance payment;
• a customer demands a refund;
• an unplanned repair is needed.

For each situation, define an acceptable interim solution and who should be contacted. Set financial limits to suit the particular business model rather than copying them from someone else's template.

Make sure there is a deputy. If all authority rests with one manager, dependence on the founder is simply replaced by dependence on another person. Access permissions, contact details and handover procedures must allow the business to keep operating during the manager's absence.

3. Account for the cost of delegation and the franchisee's involvement

In the financial figures for a company-owned outlet, the founder's work is often not shown as a separate cost. For a franchise with an employed manager, this gives a misleading picture of expenses. Show management costs separately from the owner's income and payments to the franchisor.

The calculation should include the manager's pay, statutory employer contributions, recruitment, induction and cover during absences. If some tasks remain with the franchisee, list them explicitly. Having a manager does not mean the owner no longer needs to deal with payments, staffing decisions and oversight of funds.

It is useful to prepare two operating models for the same outlet: one managed personally by the owner and one run by an employed manager. The differences should cover not only costs, but also time commitments, access to information and the speed of approvals. This is not a promise of returns, but a way to show how much involvement the franchisee will actually need to provide.

During negotiations, ask specific questions: who approves payments, who makes hiring decisions, and who will cover if the manager leaves? An answer such as “we'll find someone after opening” means the management arrangements are not yet ready.

If your model requires an actively involved owner, say so. An honest limitation is more useful to a franchise network than the promise of a business that supposedly runs without its owner's involvement.

4. Document the boundaries

In Belarus, franchising is specifically regulated by Chapter 53 of the Civil Code, entitled “Comprehensive Business Licence (Franchising)”. Article 910 defines the contractual arrangement under which a package of licensed rights is granted for a fee. Article 910-1 requires the agreement to be in writing and registered with the patent authority, the National Centre of Intellectual Property. An internal authority matrix does not replace this agreement.

The franchise agreement should identify the franchisee's authorised contact person, specify which communications are to be sent to them and explain how a change of contact is notified. Draw a separate distinction between day-to-day correspondence and legally significant actions: the manager may not necessarily have authority to sign amendments or take on new financial commitments on the franchisee's behalf.

The franchisee is responsible for formally documenting the manager's authority, taking account of the manager's status and the applicable employment and civil law requirements. A job description sets out employment duties, but does not always replace a power of attorney authorising someone to act on the business's behalf. The specific set of documents should be reviewed with a Belarusian lawyer.

Practical takeaway: before selling a franchise, prepare a decision-making matrix, a calculation of management costs and a procedure for covering the manager's absence or departure. If these documents do not make clear who can act without the founder, the delegation model still needs work.