Who Can Sell a Franchise in Belarus: An Individual Entrepreneur or a Company?

An established business may have a recognised brand, steady sales and a clear operating model, but these alone are not enough to enter into a franchise agreement. First, you need to establish who will legally grant the franchise. This is an important check in the Belarusian franchise market: the business owner, the company operating the outlets and the rights holder are not always the same person or entity. Here is how to allocate these roles before negotiating with your first partner.

Why the distinction between an individual entrepreneur and a company matters

Belarus has no standalone franchise law, but this does not mean there are no specific rules. The Civil Code contains a chapter entitled ‘Comprehensive Business Licence (Franchising)’. A franchise is legally granted through a comprehensive business licence agreement.

Article 910 of the Civil Code defines this agreement in terms of granting a package of licensed rights, for a fee, for use in the licensee’s business activities. This package includes the right to use a corporate name, undisclosed information and any other intellectual property specified in the agreement.

It is important to distinguish between the general rule on who may be a party to the agreement and the requirements governing the rights being granted. Commercial organisations and registered individual entrepreneurs may participate in franchise relationships, but only a commercial organisation can grant a franchise, because it is the entity that has a corporate name. The licensee, or franchisee, may be either a commercial organisation or an individual entrepreneur.

Practical takeaway for business owners registered as individual entrepreneurs: you cannot simply download a franchise agreement, insert your details and start selling franchises. You first need to put a structure in place involving a commercial organisation that can lawfully grant the full package of required rights. Owning a trade mark as an individual entrepreneur does not, on its own, resolve this issue.

How to choose the company that will hold the rights

If the business already operates through a commercial organisation, start there. There is no blanket requirement to set up a separate company for franchising. Creating one is a management decision that should be assessed with a lawyer and an accountant.

Draw up a simple map of the existing business:

• who enters into contracts with customers and receives revenue;
• who employs staff at the existing outlets;
• who owns the rights to brand identifiers and operating materials;
• who holds the undisclosed information relating to the business model;
• which organisation will sign agreements with franchisees.

For each item, identify a specific person or entity rather than simply naming the brand. Saying ‘this belongs to our group’ does not establish who has the authority to enter into a transaction.

If a new company is to become the rights holder, sharing a founder with the existing business is not enough. The rights and necessary contractual arrangements must be formally documented. Take particular care where contractors created the materials, the founder personally owns the trade mark and another organisation runs the outlets.

The purpose of this review is not necessarily to bring all assets into a single legal entity. It is to confirm that the chosen company is entitled to grant the licensee the precise package promised in the agreement. How each element is documented will depend on the legal rules governing it.

How to separate the rights holder from the outlet operator

Imagine an established business with several company-owned outlets. One company serves customers and employs staff, while another is intended to sign franchise agreements. This structure requires a clear allocation of responsibilities: the operator’s experience does not automatically become a resource available to the rights holder.

Before launching, answer three questions. Who will give the partner access to operating materials? On what legal basis will staff from the existing network carry out tasks for franchisees? Which company will be accountable to the partner for delivering what the agreement promises?

Record the answers in internal documents and any necessary agreements between the organisations. If the operator’s staff provide training but the rights holder undertakes the obligation to the franchisee, the two companies must agree on the arrangements for that work.

Check payment flows separately. The recipient of payments must be consistent with the contractual structure. Do not specify a company’s bank account simply because it is more convenient for the accounts team, without a clear legal basis. Across the commercial proposal, agreement, invoice and correspondence, the partner should be able to understand exactly who they are dealing with.

What to check about a prospective franchisee’s status

Even if an entrepreneur handles the negotiations personally, the licensee under the agreement may be a company they have set up. Check not only the individual but also the specific party to the transaction: its name, taxpayer identification number (UNP), state registration details and the signatory’s authority.

A private individual without the appropriate business status cannot be the licensee under a franchise agreement. If a candidate is only planning to register a business, do not substitute their personal details for those of the future company in the main agreement.

Candidates registered as individual entrepreneurs require an additional check. In Belarus, the activities permitted for individual entrepreneurs are listed in Council of Ministers Resolution No. 457 of 28 June 2024, ‘On Types of Individual Entrepreneurial Activity’. Compare the outlet’s actual operating model with the current version of the list, rather than relying solely on the franchise’s name.

An individual entrepreneur’s right to act as a licensee under a franchise agreement does not mean they are permitted to carry out any type of business activity. If the format combines several activities, check each one separately. If there is a mismatch, discuss operating through a commercial organisation before signing the agreement.

How to document readiness for the transaction

Prepare a brief summary of the legal structure: the rights holder, the operator of company-owned outlets, the licensee, the legal basis for granting the rights, the signatories and the payment recipients. Attach supporting documents and flag any unresolved issues.

This does not replace the mandatory requirements for a written agreement and registration with the National Centre of Intellectual Property. Under Article 910¹ of the Civil Code, failure to comply with the form and registration requirements renders the agreement invalid. Equally, registration does not replace a preliminary review of the business structure.

Practical conclusion: before offering a franchise, identify the commercial organisation that will act as the rights holder and confirm its authority. Then check the licensee’s legal status. Only after these steps can the brand’s promises be systematically translated into contractual obligations.