Discusses opportunities for U.S. franchisers and legal requirements in the market.

Entrepreneurship is very popular in Hungary, many people try and set up their own ventures. One of the most popular forms of business is franchising, and therefore, there are more than 300 franchise chains operating in Hungary, many of which expanded beyond the borders already. Entrepreneurs are more likely to join franchises that have already been introduced to the market: although there is a significant interest in acquiring master franchise rights, finding the right partner can be challenging.

Relatively high royalty fees, inflexibility of the franchise concept and limited access to capital force successful franchisors to modify the typical American model to succeed in Hungary. McDonald’s, the most successful and popular fast food franchisor in Hungary, uses multiple franchising techniques, often acting as a real estate developer, purchasing land and buildings and assigning a partner to run and manage its restaurants based on local consumers’ expectations, needs and tastes. Another franchising technique frequently used involves the purchase of a master franchise by a company or group of private investors, who then own and operate most of the outlets. This is the model used by Burger King and Kentucky Fried Chicken.

Tips and suggestions for entering the Hungarian market include:

  • Proper assessment of the franchise-fee
  • Tailoring the assortment to local needs
  • Continuous support and assistance
  • Registered trademark
  • Cultural differences to be kept in mind
  • Correct adaption of the concept for the market
  • Education could be needed as some foreign brands may be unknown to Hungarians (especially if the target audience is older)


There is no specific franchise law in Hungary, however with the adaptation of the new Civil Code, a set of special legal regulations for franchises came into existence, in line with European norms. The same regulations and policies apply to set up a franchise or to establish a company. Membership in the Hungarian Franchise Association is recommended but not obligatory. U.S. businesses looking to franchise within the European Union will likely find that the market is quite robust and friendly to franchise systems in general. There are numerous laws and regulations that govern the operation of franchises within the EU and these laws are fairly broad and generally do not constrain the competitive position of U.S. businesses. The potential franchiser should take care to look not only at the EU regulations, but also at the local laws impacting franchising.  More information on specific legislation is on the website of IFA and the European Franchise Federation.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.