Franchising in the CEEC’s: a sector rapidly expanding
Hungary: business opportunities
The market share of the franchise in the Hungarian retail trade should double within 10 years. This dynamism is worth the support of the government to him: its supporting program for SMEs proposes improved loans interest rates to encourage the establishment of new networks and the Széchenyi plan granted in 2001 nearly 4 million euro of assistance to facilitate the development of franchise networks.
There isn’t any legislation specific to the franchise. There are consequently wide possibilities for the contractual negotiation. A decree of 1999 (246/1997 XII.20) excludes franchise’s contracts from a restrictive legislation limiting competition as well as the building of vertical trusts without preliminary obtaining of a licence near the Hungarian government.
A strong development potential exists in the services where the franchising is at the moment sub-represented (particularly in mail services, automotive products and services, real estate, maintenance and repair, carriage of people and goods, steam pressing, tourism, Internet cafés and sandwich bars). On the other hand, the fast-food and the ready-to-wear clothing sectors are partly saturated.
Slovenia: a fast development
Among the franchise networks experiencing a fast development in Slovenia, one can quote « McDonald’s » with 14 restaurants (including 10 franchized) and « English First » (language courses) with 3000 pupils. The specificity of the Slovenian market (where the majority of the companies are SMEs) offers great opportunities for the export of French products by the mean of the franchise.
Moreover, let’s note that the big companies distributing consumer goods in Slovenia (Mercator, Petrol), are on one side franchisers (Mercator developed 86 franchized stores through the country), and on the other side they are also potential partners for the development of the franchise in their own buildings (Mercator holds in its great shopping centres several franchized stores of the Slovenian manufacturer of ready-to-wear clothing Mura, and of the Swiss chain Intersport).
Bulgaria: an interesting progress
The franchising is a recent creation in Bulgaria, but it progresses continuously. The franchise is particularly developed in the fast-food sector: McDonald’s, the Kentucky Fried Chicken chain, the Dunkin Donuts biscuit chain, Pizza Hut as well as the « Happy restaurants » chain (which inaugurated the franchise in Bulgaria in 1993), are present on the market.
The fast-food sector doesn’t have the prerogative of the franchise any more; the franchise of consumer goods as well as services develop: the Sofian company Neostil is thus the first franchized of the Greek furnishing group Neoset; the recruitment’s agencies Hill International and Snelling are also present in Bulgaria by the mean of the franchise, just as Policontact. Two American hotel chains, among which Days Inn, also intend to resort to this mode of establishment, as well as the carpet manufacturer Thermoshield. The ascendancy of the Americans on the Bulgarian market should not dissuade the other foreign companies to be interested in it, as far as the Bulgarian Franchise Association (BULFA) is able to supply them an assistance in the search for franchisees.
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