Piloting a Franchise in Belarus: How to Test Your Business Before Selling

A successful company-owned outlet does not, on its own, prove that a business is ready to be franchised. Its profits may depend on the owner’s personal connections, preferential rent or unpaid day-to-day work. Before inviting entrepreneurs to join your franchise network, run a pilot: test whether a separate team can reproduce the results under conditions close to those a future franchisee would face.

1. Define exactly what the pilot must prove

A pilot is not a showcase outlet receiving the highest possible level of support. It is a test of whether the business model can be replicated. Its purpose is to identify which advantages will be available to future franchisees and which will remain exclusive to the founder.

Set out testable hypotheses before you begin:

• an employed manager can run the outlet without constant intervention from the owner;
• customers come because of the offering and marketing, rather than the founder’s personal reputation;
• suppliers are willing to serve a new outlet on terms that can be replicated;
• the business delivers an acceptable financial result after all costs, including the proposed franchise payments;
• the support team can handle franchisee requests within the planned budget.

For each hypothesis, define a metric, a data source and a criterion for success. For example, assess the manager’s independence through an intervention log rather than the owner’s impressions: what problem arose, who resolved it and how long it took.

Do not impose a one-size-fits-all pilot period. The observation period should cover launch, routine operations and typical fluctuations in demand. If the business is seasonal, peak-season results must not be presented as evidence of sustainable year-round performance.

2. Choose an outlet and remove the founder’s advantages

You can use a new company-owned outlet or an existing site placed under a separate manager. A new outlet provides better evidence of launch costs and the cost of attracting the first customers. An existing outlet offers a cheaper way to test the team’s independence, but does not demonstrate that the same demand will arise elsewhere.

Prepare a pilot profile covering the city, location, floor area, footfall, team structure, equipment, lease terms and supply arrangements. Alongside these, identify which conditions future franchisees will need to replicate. If your outlet occupies an exceptional location, do not use its figures as the baseline forecast for every site.

Set rules for the founder’s involvement in advance. They may intervene where safety is at risk or substantial losses are likely, but every intervention must be recorded. An owner quietly stepping in to ‘save’ a shift makes the test results unreliable.

Account separately for hidden resources: free work by the parent company’s accountant, deliveries in a personal car, rent-free storage or discounts from contractors the owner knows. Keep actual amounts in the accounting records, but replace exceptional terms with realistically available offers in the prospective franchisee’s model. Do not mix these two calculations.

3. Calculate the economics for both sides

Maintain two linked budgets: one for the outlet and one for franchise support. The first shows whether the franchisee’s business is viable; the second shows whether the franchisor can deliver on its promises. A profitable outlet does not make the franchise relationship sustainable if support costs exceed the fees received.

The outlet budget should include:

• initial investment, the lease deposit and opening stock;
• the manager’s salary and all staffing-related costs;
• purchasing, logistics, stock write-offs, rent, utilities and equipment maintenance;
• marketing, payment processing fees, taxes and any applicable compulsory payments;
• proposed royalties and advertising contributions;
• working capital for the period before sustained positive cash flow is achieved.

Record the initial franchise fee as an upfront cash outflow for the prospective franchisee, rather than treating it as a substitute for monthly costs. Distinguish profit from cash flow: buying stock or receiving payments late can create a cash shortfall even when sales are profitable.

In the support budget, record time spent on training, site visits, advice, quality control and assistance with opening. Cost the work at the rate of an employee capable of replacing the founder. Then test scenarios involving lower sales, higher purchase prices and a delayed launch. Show which costs can be reduced and which will remain unchanged.

4. Put the right legal arrangements in place for an external partner

An internal test at a company-owned outlet and a pilot involving an independent entrepreneur are legally different. If another entrepreneur receives a package of rights to operate under your business name and use confidential know-how, calling it a ‘test launch’ does not, in itself, remove it from the scope of franchising rules.

Belarus has no standalone franchising law, but the Civil Code specifically regulates these relationships through a comprehensive business licence agreement (franchising agreement). Article 910 defines the arrangement, while Article 910-1 requires the agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property. Failure to register makes the agreement invalid.

Before running an external pilot, ask a Belarusian lawyer to review the package of licensed rights, their ownership, and the terms governing the use of the trade name and undisclosed information. If the right to use a trade mark is being granted, check that it is protected in Belarus and that the rights holder has the authority to grant its use. Do not replace a franchising agreement with a consultancy agreement simply to reduce the paperwork.

Agree on launch costs, fees, access to data, the allocation of losses and the procedure for ending the relationship. Make clear that the financial forecasts are experimental. State registration of the agreement does not confirm that the business model is profitable.

5. Make an evidence-based decision

Conclude the pilot with a written report covering actual results, deviations from the plan, the founder’s interventions, support costs and unresolved problems. Divide the findings into three groups: confirmed, requiring further testing and not yet replicable.

It makes sense to continue preparing to sell franchises when both the team’s independence and the financial model have been validated. If results depend on the owner’s unpaid work, revise the model first and repeat the test. Show prospective network members the conditions behind the pilot figures, not just a successful month.

Practical takeaway: before selling a franchise, use a pilot to prove that the business can operate without the founder’s constant involvement, afford the proposed franchise payments and receive support at an economically viable cost.