Pre-contract Franchise Disclosure in Belarus

When an established business prepares to sell franchises, a presentation outlining the benefits is not enough. Prospective partners need information that allows them to assess their obligations and risks before making a decision. For the franchising community, this is the foundation of trust: the business owner shows not only the strengths of the model, but also how far it has been tested. A practical tool is a single pre-contract information pack consistent with the draft agreement.

1. Separate legal requirements from voluntary disclosure

Belarus has no standalone franchising law, but franchise relationships are specifically governed by Chapter 53 of the Civil Code, ‘Comprehensive Business Licence (Franchising)’. Article 910 defines an agreement under which a rights holder grants a user, in return for payment, a package of licensed rights for business use.

Article 910¹ requires the agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property. Failure to register renders the agreement invalid. Providing a presentation, financial model or information sheet does not replace this procedure.

Belarusian franchising rules do not prescribe a specific mandatory franchise disclosure format or a standard deadline for providing it, unlike the requirements in some other countries. You should therefore not present your own information pack as a government-approved document. It is a voluntary process for preparing a transaction that helps both parties make informed decisions.

When preparing the materials, also take account of general civil law provisions and legislation on advertising, trade secrets and personal data, depending on the content and how the information is shared. The absence of a specific disclosure format does not make unsupported promises safe.

2. Gather verifiable information about the offer

Put one member of staff in charge of the pack. Their task is to gather information from the finance team, outlet managers and a lawyer, resolve inconsistencies and state the date as at which the information is current. Do not let each sales manager produce their own description of the same franchise.

Include the following sections:

• Who is offering the franchise. The rights holder’s name, registration details, a contact for enquiries and its role in the existing business.
• How the model has developed. When trading began, which formats are actually operating, and which outlets are company-owned or partner-operated.
• What the partner receives. A brief description of the rights, materials and services provided, without replacing the substance of the future agreement with promotional language.
• What remains the partner’s responsibility. Finding premises, recruitment, working capital and other tasks they must handle themselves.
• What restrictions apply. Material requirements relating to the format, product range, purchasing and the owner’s personal involvement.

If there are no franchised outlets yet, say so clearly. A successful company-owned outlet demonstrates experience of running the business, but does not prove that an independent partner has already replicated the results.

Identify supporting evidence for each material claim: a management report, a list of operating outlets, documentation of rights or an approved service description. It is better to remove an unverified claim than to dress it up with words such as ‘usually’ or ‘typically’.

3. Explain the financials without guaranteeing results

Pre-contract disclosure does not require you to promise returns. Its purpose is to explain where the figures come from and the circumstances in which they may be useful to a prospective franchisee. Separate actual results from the existing business, a modelled scenario for a new outlet and target figures. Do not combine them in a table headed ‘Your future income’.

For actual figures, specify the period, outlet format and any material circumstances: owned or rented premises, the founder’s involvement, seasonality and unusual expenses. Explain exactly what you mean by profit and which costs have already been deducted. Revenue figures without costs do not allow someone to assess how attractive the offer is.

In forecasts, set out the assumptions for customer numbers, average spend, rent, staffing costs and the time needed to reach the expected operating level. Show how the outcome changes if sales grow more slowly. This is more useful than a single attractive payback date.

It is helpful to divide the prospective franchisee’s costs into three groups: payments to the rights holder, set-up costs and funds needed to operate until revenue becomes consistent. For each group, state what is included, what is calculated separately and which amounts depend on the city or premises. A disclaimer that ‘results are not guaranteed’ does not remedy a calculation that leaves out material costs.

4. Organise delivery and updates to the pack

Provide the materials early enough for the prospective franchisee to review them before signing the agreement and taking on financial commitments. Establish an internal review process, but do not describe your chosen review period as a mandatory requirement of Belarusian law.

Use a simple workflow:

1. Give the pack a date and version number.
2. Send the prospective franchisee a list of files and the current draft agreement.
3. Invite them to submit questions in writing and discuss the materials with independent advisers.
4. Record the answers, especially where they clarify costs or the scope of services provided.
5. If anything material changes, send updated information before the transaction is concluded.

Disclose commercially sensitive details in stages, where necessary after confidentiality undertakings have been put in place. Aggregated figures are usually sufficient for an initial assessment: there is no need to share customers’ or employees’ personal data alongside the calculations.

Acknowledgement of receipt is useful for tracking document versions, but should not become a declaration by the prospective franchisee waiving all claims. Before signing, compare the pack, correspondence and agreement: a sales manager’s promises must not conflict with the terms of the deal.

Practical takeaway: before you start selling franchises, prepare a single disclosure pack containing verifiable information. Be clear about how well the model has been tested, the costs involved and the uncertainty of forecasts, then keep that information up to date.