Expanding universe

Franchising is regarded as a type of business within retail where risks are relatively low. 25 out of the top 100 franchise ventures on the list compiled by Entrepreneur magazine operate in catering. The situation is similar in Hungary, where most of the largest international chains have already established their presence. There are also many enterprises which regard themselves as franchise chains, but are in fact something else. In the classic business model, the franchiser operates some units itself (for example 7,000 out of 31,000 McDonald’s units) and theoretically only well proven units should be handed over to franchisees. This is why some chains have no franchisees yet. What is the key to success in the Hungarian catering sector? Cafes seem to represent the greatest potential at the moment. Countless units are opened every week. Probably, one of the main reasons of their popularity is that there is no need to complete the lengthy and highly bureaucratic licensing procedure, which is required if one intends to open a restaurant. The abundance of international franchise systems in the market of cafes is proof of the substantial purchasing power which coffee fans represent. The other dynamic line of business within franchise is that of conventional, American style fast food, where European markets are dominated by multinationals. This is why new systems are generally built around some new type of meal like potato or seafood. It is refreshing to see the dynamic growth of the fast casual chains, which combine healthy meals, with speed and quality. Vapiano is a good example. Several international ventures exist which specialise in developing concepts for sale and generate revenues not only from franchise fees, but also from selling “cheap” products and services.