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Hungarian Franchise Association

The Hungarian Franchise Association was established in May 1991 by 17 companies operating in different fields of franchising. Among these companies there was a Hungarian franchise called City Grill and McDonald's, the pioneer of international franchising as well. Out of these founders only McDonald's has remained member of the Hungarian Franchise Association, new coming franchise companies replaced others.

Currently around 300 companies exist in Hungary, which qualify themselves as or claim to be franchises. Among these companies many offers multi-level marketing systems as franchise activity or they use the word franchise to sell their businesses in a fashionable and sophisticated way, while they are neither legally nor financially independent companies or partnerships. Except these operations the Hungarian franchise community consists of approximately 250 companies (international statistics provide only estimates of number of franchising entities due to the fact that except few countries in the world franchise companies do not need to be registered). Number of franchisees is approximately 20.000 in Hungary and 100.000 employees work in the franchise sector including suppliers.

70% of franchise systems are based on Hungarian ideas and owned by Hungarian companies as well. The other 30% 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. This is a good background to be able to do significant lobby activity for ethical operation of franchise businesses. The Hungarian Franchise Association assists franchisees to operate according to the European Codes of Ethics. There are no additional regulations for franchise operations in Hungary. After terminating the Block Exemption Regulation of EU, there is even no legal paragraph containing the word franchise, however all legal condition is provided for operating an ethical franchise business in Hungary.

The activities of the Hungarian Franchise Association 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 county chambers. Last but not least, the Association helps to find appropriate franchisors and franchisees each other, and in relation to this we do market organizing activities as well. The Association published "Franchise Entrepreneurship" titled book, in 2011 to describe the basics of franchise to everybody who is interested to learn more about this topic.

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