Magazine: With us or without us

The popularity of franchises is growing rapidly in Hungary.

dr. Katalin Mandel
general secretary
Hungarian Franchise Association

Katalin Mandel, general secretary of the Hungarian Franchise Association told our magazine that approximately 25-30 percent of franchise networks active in Hungary are members of the association. Those who wish to become members must undergo an audit. Members comply with the Code of Ethics of the association, which is also attached to the contracts they sign with new partners.

Márk Maczelka
head of communications
SPAR

Márk Maczelka, head of communications with SPAR opines that a growing number of businesses realise the advantages of becoming part of a franchise network. From the franchisor’s perspective new capital and expansion are the benefits, while on the franchisee side enterprises can profit from adopting a well-working business model.

dr. János Zlinszky
member of the board
BENU Magyarország

János Zlinszky, a member of BENU Magyarország Zrt.’s board of directors revealed that none of their 120 franchisees decided to quit yet. It isn’t a surprising thing: centralised sourcing and lower utility costs increase the profitability of members.

Sándor Lencsés
franchise and concept
director
Fornetti Group

According to Sándor Lencsés, Hungarian franchise and concept director of Fornetti Group, the franchise system offers great operating safety to members. Franchisees get ready-made technological, administrative and marketing concepts. Fornetti operates franchise networks in several countries.

Batki Attila
franchise-igazgató
Norbi Update Lowcarb

Attila Batki, franchise director of Norbi Update Lowcarb Zrt. reckons that taking out a franchise has many advantages: it takes less capital for an enterprise to use an already introduced and established brand name, and it also receives help in starting and managing its business.

Kálmán Tóth, programme director of Patika Management Kft. told Trade magazin that the franchise model creates a win-win situation. He thinks that the franchise system isn’t as widely known in Hungary as it should be, and there are no decades of experience in using it.

Attila Halászi
sales director
Herbaház/Bennovum

Attila Halászi, sales director of Herbaház/Bennovum Kft. reckons that the owners of certain shops don’t want to become part of a chain, because they are afraid that they will lose their independence, name and identity; others see the great opportunities provided by franchise systems: lower prices in sourcing, lower marketing costs, centrally organised promotions, etc. New members have a ‘starter pack’ at their disposal to make the beginning easier for them.

Ramóna Molnár
strategy manager
BioHair Franchise Központ

Ramóna Molnár, strategy manager of BioHair Franchise Központ underlined: operating as part of a franchise system means smaller risks and more rapid success, thanks to the ready-made business model. At the same time the franchise owner profits from the expansion and the brand name becoming better known.

Károly Riffer
franchise operations
director
BITE bakery café

Károly Riffer, franchise operations director of BITE bakery café explained that there had been great changes in the hospitality sector after 2010, when such products and services entered the market that hadn’t been available before, plus new, Hungarian concepts also appeared on the scene. Investors soon became interested in these well-working concepts.

Ms Mandel talked to us about the challenges of teaching new franchisees what they need to know and keeping them trained – more and more franchisors use the method of E-learning for these tasks. Mr Zlinszky explained that the segment of pharmaceuticals is special, so those who become BENU members are already experts of their field. Still, representatives of the franchisor regularly visit the new joiners in the preparation phase, and 2-3 times a month later as well. Mr Tóth believes that they are lucky, as the new franchisees join after an ‘audit’ performed by the sales team of parent company Hungaropharma Zrt., so they are quite knowledgeable about how things work. Mr Lencsés opines that the biggest challenge is passing on the necessary information. To do this, Fornetti operates a special bakery shop technology advisor team, which regularly organises trainings too.

Mr Maczelka revealed that SPAR starts providing new franchise partners with the know-how already when the shop is being prepared for membership. A designated sales consultant also assists franchisees in everything. Mr Halászi talked to us about the importance of ‘mindset changing’: the sooner the new partner starts thinking the same way as the franchise owner, the earlier the cooperation becomes successful.

András Pólus
managing director
Crown Foods

András Pólus, managing director of Crown Foods Kft. told our magazine: they use a mystery shopper system, an audit system and workers need to pass exams. Their experience is that complying with the rules often depends on how motivated workers are and how much they are aware of various standards. BITE bakery’s partners receive personal help already from the first steps. Mr Batki shed light on the fact that Norbi Update had developed many training programmes and its own audit system, so that new partners without previous experience can also be successful franchisees. Ms Molnár informed that BioHair uses inspections and mystery shopper visits to make sure that partners comply with the rules and standards.

What about the modification of some contractual terms – in most cases temporarily – in order to achieve certain goals? Mr Zlinszky can imagine such a thing, e.g. in small towns or places where only their competitors have been present before. Mr Batki would only do so to improve the competitiveness of the network. Mr Pólus revealed: they have never done so before, but they are open to new ideas from partners. Mr Halászi thinks that in the first phase of the franchise partnership the most critical part is harmonising the systems that already exist. Ms Molnár reckons that being flexible is of utmost importance. Mr Maczelka said: they sign franchise contracts with partners with the same conditions. Mr Lencsés told that they operate a diverse and multifaceted franchise system, but they offer no individual terms to anyone. //