Systemic thinking

By: Ipacs Tamás Date: 2024. 03. 27. 11:20

On 25 January the 17th awards gala of the Hungarian Franchise Association took place at the Hilton Budapest Hotel, where the 2023 Franchise Network of the Year Award went to Alma Pharmacies.

This article is available for reading in Trade magazin 2024/4

For the second time, the Recession-resistant Franchise Network of the Year Award has been handed out, this time to the Immo1 network. Otthon Centrum won in the International Network Expansion of the Year category. EverDerm Laser & Beauty Clinic went home with the Marketing Award of the Year. The winner of the Internet Media and Web Award was Duna House, while the Most Dynamically Developing Franchise Network of 2023 became the BENU Pharmacy network. Café Frei was named Innovative Franchise Network of the Year. In 2023 the Franchisee of the Year was CBA partner Pahola and Pahola Kft. and the Multi-brand Franchisee of the Year Award went to S.Bedi Kft. This time there were two winners in the Multi-unit Franchisee of the Year category: János Tóth, franchise partner of the laundry network Bubbles and Áron Horning, franchise partner of Duna House. Emerencia Pörös, a franchisee of the Otthon Centrum network was named Young Franchisee of the Year.

Present and future

Dr. Kupai Mihály-Benu

Dr. Mihály Kupai
franchise director
BENU Magyarország

“Inflation, rising energy and labour costs, and declining purchasing power have also caught up with the franchise sector. Several networks have been forced to downsize, close units or change their business model. However, it is important to note that these negative changes are likely to have affected members of franchise networks less than independent operators”,

says Dr Mihály Kupai, president of the Hungarian Franchise Association and franchise director of BENU Magyarország.

In 2023 a number of new concepts appeared in the franchise sector. These are start-up networks with a few new units, so it is difficult to say whether they are viable and whether they will develop in the future. In any case, franchising as a form of operation has remained popular.

László Kegyes, sales manager of Alma Gyógyszertárak took over the Franchise Network of the Year Award from dr. Katalin Mandel, general secretary of the Hungarian Franchise Association

Szilárd Kelemen
commercial director
Fornetti Group

“Although the pandemic and the subsequent unpredictability of the economic environment have had an impact on the segment, we don’t see fundamental changes in the situation of the domestic franchise market”,

says Szilárd Kelemen, commercial director of the Fornetti Group, which was voted the best franchise network on the continent by the European Franchise Federation last year.

Fornetti is making steady, constant, forward-looking progress – even in the most difficult year of the pandemic, Fornetti Group opened 150 new units in Hungary.


At the annual gala evening of the Hungarian Franchise Association, the most outstanding franchise networks and recipients of the past year are awarded

With or without us?

Ottó Burger

“The development of franchising in Hungary varies greatly across the different sectors, because the pace of development in a new field such as beauty services is very different from that of enterprises which have been part of a franchise network for decades. For any business, predictability and a predictable regulatory environment are very important. We believe that franchising can be the key to survival for smaller businesses”,

says Ottó Burger, the CEO of CBA.

Gabriella Tánczos 
head of franchise
Café Frei

“Networks have optimised their operations, which will have a positive impact in the longer term. We have also reviewed our operations, product selection and cost structure. The focus has been on cash flow and efficiency – and our franchise partners could feel this”,

explains Gabriella Tánczos, head of the Café Frei franchise. In her view brand awareness and brand recognition depend very much on good central regulation, and the benefits of this are felt by franchise operators.


With fresh dynamism

Maczelka Márk, SPAR

Márk Maczelka
head of communications
SPAR Magyarország

“The popularity of franchising has grown among retailers and we can see this from the number of applications from businesses that wish to join us. It is more difficult and complicated for an independent retailer to purchase goods and they can’t operate as cost-effectively, which makes it harder for them to compete on price. We can offer simpler, faster, more predictable product supply, not to mention background support such as the IT system and personal assistance”,

argues Mark Maczelka, SPAR’s head of communications.

Zoltán Matskási 
marketing and 
business development director

Zoltán Matskási, marketing and business development director of Pek-Snack:

“In 2023 the Hungarian Pek-Snack franchise network had to face new challenges, due to changes in the number of customers and the size of the shopping basket. In order to make Pek-Snack units more competitive, we have introduced new types of promotions, with different product categories being the focus of campaigns”.


Which way to go?

BENU’s network kept growing last year, so in 2023 they celebrated the addition of the 250th franchise partner. Their business concept is already fully fledged, so they don’t plan to make big changes, but they are adding a couple of new elements every year. In the coming years BENU intends to continue with the current dynamic expansion, and it seems that the interest of pharmacies in their concept remains high. Fornetti’s focus is on rapid adaptability, standardised communication, and unique/original product development – primarily with a health conscious and environmentally friendly approach. The company calculates with further expansion and is increasingly focusing on daytime meals, for instance with new products such as the Fornetti hot dog. CBA has made great progress in product development: they have responded to the bigger price sensitivity of customers by increasing the share of cheaper products in stores, and further expanding and developing the private label Red range, in cooperation with CBA partners in Romania, Slovakia and the Czech Republic. Their regional centres serve many independent partners, and the reliable and mutually beneficial cooperation creates the basis for both parties to move forward and join the franchise system.

Easier to adapt

The SPAR franchise network has been growing dynamically. They place great emphasis on promotions and ensuring product availability. The development of the network will remain a priority, and the retailer wants to reach out to municipalities where the level of service isn’t adequate. SPAR wants to contract with partners who value and prioritise the chain’s commitment to high quality. Café Frei is constantly working on expanding the network both domestically and internationally. They already have units in eight countries; however, changes need to be made in the concept for the system to be stable abroad. Café Frei Shops have appeared in the cafés, adding private label and other products to the assortment. Their aim is to transform Café Frei from a coffee brand into a food brand in retail. //

Interests and synergies

The Hall of Fame Award of the Hungarian Franchise Association recognises the work of outstanding personalities in the Hungarian franchise profession over several decades. This year the award went to Endre Fazekas

Endre Fazekas
Hall of Fame-awardee
Hungarian Franchise

“In 1991 when we founded and launched the Hungarian Franchise Association, we were guided by the intent and conviction that this form of entrepreneurship and cooperation will undergo an explosive development in the next two decades, becoming a dominant model for small businesses, especially in the services sector.

The more than 20 years that have passed are partly a success story, but partly stayed below my personal expectations. The success of a well-functioning network lies in its ability to combine the efficiency and growth elements of the size of large companies with the autonomy and flexibility of small businesses.

An important condition for long-term partnership and staying in the system is a fair franchise contract. Synergies in joint procurement and logistics, systemic IT support, brand building, education and training, real know-how, a standardised image and fine-tuned operational processes are all areas that can enable small businesses to prosper. I am convinced that there is huge potential in the development of franchising in Hungary, for instance in retail trade”. //


Things that make the system work

Business development and franchising consultant Márton Elek has answered our franchise-related questions. Why does it make sense to expand a well-organised, profitable business through franchising?

Márton Elek
business development and franchise advisor

Expansion requires no own capital, so in principle there is unlimited growth potential. Franchisees aren’t subordinates and therefore don’t need to be supervised, as they are working for the success of their own businesses. Increased distribution leads to greater brand awareness. In principle it is enough just to develop know-how, and for this the acquirers pay money.

What are the things to look out for?

The positioning of one’s business should be perfect. A business may be profitable even if positioned incorrectly, but the franchisor has a moral responsibility to only allow a franchise to open in a location where the partner can succeed. It isn’t sure that if the franchisor’s business does well, all franchisees will also do well! The transferability, training and accountability of operational processes must be addressed. In a network with many separate entrepreneurs, it can easily happen that a franchisee knows something better. It is necessary to recognise the good – the know-how that can be adopted.


Franchise exhibition in Budapest once again

In 2024 there will be another Franchise Exhibition in Budapest, with nearly 40 exhibitors on more than 900m². Besides the well-known Hungarian franchise networks, there will also be British, American and German concepts showcased. The event will take place on 4 April in Lurdy Ház, and the programme will also feature a conference with presentations to help both entrepreneurs and franchise owners.


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