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How to expand in Hungary?

How to expand in Hungary?. Franchise business in Hungary. Presenter: Tibor Kőrösi CEO of J.PRESS, board member of the Hungarian Franchise Association www.franchise.hu. Important facts about Hungary. Area: 93,000 km2 Population: 10 .005.000

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How to expand in Hungary?

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  1. How to expand in Hungary? Franchise business in Hungary Presenter: Tibor Kőrösi CEO of J.PRESS, board member of the Hungarian Franchise Association www.franchise.hu

  2. Important facts about Hungary • Area: 93,000 km2 • Population: 10.005.000 • GDP (2009): 93billion EUR • Main cities: - Budapest 1,712,210inhab. • Debrecen 207,200 • Miskolc 169,226 • Szeged 169,731 • Pécs 157,680 • Strategic geographical location • Member of EU

  3. Fan chart of the GDP forecast Hungary Source: National Bank of Hungary

  4. Unemployment rates: commonly used definitions Source: OECD

  5. Slovenia Franchisor : 110Franchisee : 1.100 Austria Franchisor : 330Franchisee: 4.700 Romania Franchisor: 170Franchisee: 1.100 Ukraine Franchisor : 301 Franchisee: 18.170 Croatia Franchisor: 150Franchisee: 1.000 Serbia Franchisor: 50 Bulgaria Franchisor:140Franchisee:2900 The franchise-sector in Hungary is leading in East-Europe Czech Republic Franchisor : 330 Hungary Franchisor: 350Franchisee: 18.000 Approximate data by national associations

  6. Hungarian Franchise Association (HFA) The HFA was established in May 1991 by 17 companies. • The roles of HFA: • To represent the Hungarian franchise sector • To control the ethical franchising behavior in Hungary according to the European Code of Ethics for Franchising • To organize events for members • To promote the franchise sector Currently 350 companies operate in Hungary as franchisors. The number of franchisees is >18’000 and 100’000 employees work in the franchise sector.

  7. Hungarian Franchise Association (HFA) • The HFA has 50 members • The number of franchise units of the members > 7’000 • The number of employees of the members are> 55’000 • Franchise fees 0 – 15’000 EUR • Investment fee 2’000 – 100’000 EUR

  8. Foreignfranchise-networksin Hungary United States 20 networks, 344 units Germany 14 networks, 244 units Italy 10 networks, 61 units There are 76 foreign franchise-networks with more than 1000 units operating in Hungary. France 8 networks, 87 units Spain 7 networks, 48 units United Kingdom 6 networks, 149 units Belgium 3 networks, 29 units Poland 1 network, 3 units Ausztria 3 networks, 25 units Denmark 1 network, 2 units Sweden 2 networks, 11 units Romania 1 network, 1 unit

  9. Hungarianfranchise-networksexpandingabroad Romania 14 Slovakia 9 Poland 6 Czech Republic 3 United Kingdom 2 Bulgaria 2 Italy 2 Albania 1 Bosnia-Hercegovina 1 Croatia 1 Kuwait 1 Macedonia 1 Moldova 1 Montenegro 1 Germany 1 Serbia 1 Ukraine 1 In all 48

  10. Hungarianfranchise-networksbysectors Restaurants (23) Education (22) Miscellaneous (18) Furniture & Decoration(16) Cars (13) Hotels (6) Sport (4) Services (50) Clothes (46) Food (31) Health & Care (30) Retail (29) Business Services, Consultancy (28) Real estate (25) Around 350 franchise-networks are operating in Hungary, with more than 18000 franchisee.

  11. Members 50% of franchise systems are based on Hungarian ideas and owned by Hungarian companies as well. The other 50% are international licenses and coordinated by either subsidiaries of international companies or Hungarian companies owned by Hungarian master licensees. 20% of all franchise companies in Hungary are member of the Hungarian Franchise Association.

  12. The activities of the HFA have three major scopes • The first and the most important one is to provide the possibility of ethical franchising by influencing and controlling all regulations connected. • The second one is to extend the knowledge related to ethical franchising thru regional conferences in cooperation with country chambers. • Last but not least, the Association helps to meet franchisors and franchisees, and in relation to this we do market organizing activities as well.

  13. Peculiarities of the Hungarian Market - I. Which are those industriesthat would have good potential in Hungary: • brand new and interesting products and services • low investment • home-based franchise • services sector • e.g.: café, accessories

  14. Peculiarities of the Hungarian Market - II. Tips and suggestions about entering the Hungarian market, mistakes to avoid: • proper measure of franchise-fee • tailoring the business model and assortment to local needs • continuous assistance is expected • registered trademark • cultural differences • correct adaptation of the concept to the market • foreign brands are unknown to Hungarians • Negative example: • Wendy’s, Quick, Dunkin’ Donuts didn’t take the local peculiarities into account, and had to retreat.

  15. THANK YOU

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