Reviewing Existing Agreements Before Launching a Franchise in Belarus

An established business may already have licensees, dealers and partners operating under special terms. These obligations do not disappear when a franchise is launched: even a registered trade mark does not allow you to promise a new partner rights that conflict with earlier agreements. Building a sustainable franchise network requires a review not only of the rights you hold, but also of the commitments you have already made. Here is how to carry out that review before selling your first franchise in Belarus.

1. Gather agreements that limit future commitments

Start with the existing business’s records, rather than a franchise agreement template. The aim is to establish who the company has already authorised to use what, or committed to providing what, and on which terms. Your review should extend beyond documents with ‘licence’ in the title.

Include the following in your working collection:

• licence agreements covering trade marks and other intellectual property;
• dealer and distribution agreements containing exclusivity provisions;
• joint business activity and promotional agreements;
• agreements allowing partners to use the company’s names, logos or other identifiers;
• supplementary agreements and documents concerning the renewal or termination of relationships;
• correspondence discussing partners’ special rights.

Correspondence does not always create a legally binding restriction. Nevertheless, it is worth passing it to a lawyer: it may affect how agreements are interpreted or point to a change in terms that was never formally documented.

Put one person in charge of collecting the documents. Ask the sales team, accounts department and heads of business units to confirm that the collection is complete. Otherwise, it is easy to review the legal department’s neatly organised files while overlooking a promise made by the commercial director several years ago.

Flag any agreements regarded as terminated simply because the parties have stopped working together. A lack of orders does not, in itself, prove that the obligations have ended.

2. Map overlapping rights

Prepare a short summary for each agreement. Record the counterparty, the intellectual property covered, the permitted uses, the territory, the term and any restrictions on your company. If the agreement concerns a trade mark, include its registration details, not just the familiar brand name.

Add details of automatic renewal, termination procedures and any provisions that survive termination or expiry. Record registration status wherever registration is required by law. Do not fill gaps with assumptions: ‘confirmation required’ is more useful than false certainty.

Then compare these summaries with what you intend to offer franchisees. Check several factors together:

• whether the same intellectual property is involved;
• whether the permitted uses overlap;
• whether the rights apply in the same place and at the same time;
• whether granting similar rights to others is prohibited;
• whether the existing partner’s consent is required for new arrangements.

Use of the same brand does not, by itself, mean there is a conflict. What matters is the substance of the rights granted and the obligations undertaken. Equally, different agreement titles do not guarantee that there are no conflicts.

For example, a company may have allowed a partner to use its trade mark for certain services and undertaken not to grant similar rights to other users within agreed limits. If the proposed franchise includes the same services and falls within those limits, the commitments must be reconciled before the sale. This is a hypothetical example: the conclusion in any particular case depends on the wording of the documents.

3. Take Belarusian regulation into account

In Belarus, franchising is specifically regulated by Chapter 53 of the Civil Code, ‘Comprehensive Business Licence (Franchising)’. Under Article 910, the rights holder grants the user a package of licensed rights for business purposes in return for payment. Earlier agreements must therefore be reviewed against the entire package being granted, not just the trade mark.

Article 910-1 requires the agreement to be in writing and registered with the patent authority — the National Centre of Intellectual Property. The registration procedure is governed, among other instruments, by Resolution No. 346 of the Council of Ministers of the Republic of Belarus, dated 21 March 2009. An unregistered franchise agreement is deemed invalid.

Registration is no substitute for checking that obligations are compatible. The business owner must compare the new agreement with earlier agreements relating to the same intellectual property in advance, considering the scope of rights, permitted uses, terms and territory.

If resolving a conflict involves changing an existing franchise agreement, bear in mind that its amendments and additions must also be registered. Plan the necessary steps with a lawyer rather than relying solely on an exchange of letters between managers.

4. Resolve conflicts before offering the franchise

Choose a specific solution for each overlap identified. Sometimes it is enough to refine the proposed business arrangement. In other cases, you may need to agree an amendment to an earlier agreement, wait until it has been properly terminated, or drop some of the commitments you had planned to make.

Do not treat a partner’s verbal consent as a final resolution. Check who has authority to give consent, what form it must take and whether a formal amendment to the agreement is needed. The document should clearly state which restriction has changed and when the change takes effect.

It is useful to keep a list of unresolved issues with four columns: conflict, chosen action, person responsible and supporting document. While a material issue remains unresolved, the corresponding commitment should not appear in a commercial proposal or draft franchise agreement.

Once the changes have been agreed, update the sales materials. Otherwise, the legal team may resolve a conflict in the agreement while a sales manager continues promising prospective franchisees rights that the company cannot grant. Keep the final map of obligations and review it before entering into any new agreement that could affect members of the network.

The practical takeaway: before selling a franchise, gather earlier agreements, compare the rights already granted with your proposed commitments, and document how any conflicts have been resolved. Readiness is demonstrated not by the absence of disputes today, but by the ability to fulfil all obligations at the same time.