Renewing a Franchise Agreement in Belarus: Preparing the Terms

The first franchise agreement is often drafted with the outlet’s opening in mind. But owners of established businesses should decide in advance how a partner will be able to continue operating several years down the line. For a sustainable franchise network, renewal is more than a formality: it connects the franchisee’s investment, the condition of the outlet and the franchisor’s obligations. Below is a step-by-step approach to preparing renewal terms before selling your first franchise.

1. Choose a term that reflects the outlet’s lifecycle

In Belarus, franchising is expressly regulated by the Civil Code through what is legally termed a comprehensive business licence agreement. Article 910 provides for a package of licensed rights to be granted in return for payment. The agreement may be concluded for a fixed term or without a specified term. An indefinite term, however, does not guarantee a lifelong business relationship.

For a business owner, the term should be a management decision, not an arbitrary number copied from someone else’s template. Consider it alongside several factors:

• the time the outlet needs to establish stable operations;
• the partner’s investment in fitting out the premises, equipment and launch costs;
• the expected useful life of the equipment before a major upgrade is needed;
• the length of the lease and the possibility of renewing it;
• the duration of the rights included in the licensed package.

Do not treat an estimated payback period as a guarantee that the investment will be recovered. A financial model helps assess whether the term is reasonable, but it does not replace contractual terms or remove business risk.

Prepare an internal note explaining why you have chosen that term, which investments it takes into account and when modernisation is expected. This will help you explain the offer consistently to prospective franchisees. If different outlet formats require different terms, establish the reasons in advance rather than during individual negotiations.

2. Distinguish renewal from a promise to ‘keep working together’

It is easy to write in a presentation: ‘The agreement will be renewed if the business performs successfully.’ In practice, this is not enough. It leaves unclear who assesses success, which breaches are taken into account and what terms will be offered to the partner.

When drafting the agreement, you must take account of the Civil Code provision giving a franchisee who has duly fulfilled their obligations the right to conclude an agreement for a new term. A clause stating that ‘renewal is entirely at the brand owner’s discretion’ therefore cannot be treated as a universal solution. A lawyer should check the renewal conditions and the consequences of refusing renewal against the current legislation.

Separate three questions: when discussions begin, how contractual compliance is assessed and which document formalises the next term. Each needs its own answer.

The draft procedure should specify:

• how a request to continue the relationship should be submitted;
• who is responsible for considering it;
• which documents the parties will review and cross-check;
• how disagreements will be recorded;
• the deadline for preparing the agreed documents.

Set internal deadlines that allow enough time for negotiations and legal formalities. Do not present your chosen notice period as a statutory requirement. Separately, ask a lawyer to check the consequences of missing that deadline: it should not automatically become grounds for disregarding the partner’s rights.

3. Make the partner assessment verifiable

Renewal should not become a surprise test based on rules that did not previously exist. If the business owner wants to take the outlet’s operating standards into account, the relevant obligations must be clear to the partner throughout the relationship.

Draw up a short checklist for assessing contractual compliance. It could cover the payment position between the parties, compliance with mandatory standards, the correction of documented shortcomings and adherence to brand-use rules. This is a tool to support decision-making, not an independent basis for restricting the franchisee’s legal rights.

For each item, identify the supporting evidence. Outstanding payments should be checked against reconciled accounts; the correction of a shortcoming should be verified through a follow-up inspection or agreed evidence. It is best to avoid phrases such as ‘insufficient loyalty’ and ‘poor engagement’, as they leave room for arbitrary interpretation.

It is important to distinguish an unresolved breach from an earlier issue that the partner corrected on time. Also distinguish mandatory requirements from recommendations. A decision not to take part in an optional advertising initiative should not retrospectively be presented as a breach of contract.

Before the final discussion, share the review findings with the partner and give them an opportunity to correct factual errors. This process reduces the likelihood of disputes and helps maintain trust within the franchise network.

4. Agree on outlet upgrades and formalise the new term

By the time renewal comes around, equipment, interiors or software may need updating. It is a mistake to announce major expenditure for the first time just before the current term expires.

Decide how these changes will be discussed while you are still developing the franchise offer. Distinguish between mandatory upgrades needed to meet safety requirements, refurbishment of worn elements and a commercially driven redesign. These projects have different justifications, costs and levels of urgency.

Prepare a plan for the individual outlet covering the work required, an estimated budget, the allocation of costs, any potential downtime and completion deadlines. Do not describe the upgrade as a cost-free continuation of the relationship if the partner will in fact need to make a substantial investment. Agree separately on the fees and other payments for the next term, rather than assuming that the existing terms change automatically.

Under Article 910-1 of the Civil Code, a franchise agreement must be in writing and registered with the National Centre of Intellectual Property; without registration, it is invalid. Amendments to the agreement also require registration. A lawyer must therefore determine the appropriate way to continue the relationship: by amending the existing agreement or concluding an agreement for a new term, while meeting the relevant registration requirements. A simple letter of intent is no substitute for this process.

Practical takeaway: before selling your first franchise, prepare a rationale for the agreement’s term, a transparent procedure for renewal discussions and a template for an outlet upgrade plan. Then have a Belarusian lawyer review them alongside the agreement: management criteria should support the continuation of the relationship, not conflict with either party’s rights.