Franchising in Hungary started in the 90’s, after the collapse of the old political regime in 1989, by the opening of important hotels chains and by the entry of the most famous fast food multinational, McDonald’s. Since that time franchising has been developing swiftly in the country.
The franchise agreement is considered as an atypical item, and there isn’t any specific law to impact it, neither in the Hungarian Civil Code. Moreover, it’s quite impossible to draw up statistics or fix the exact number of chains working by franchising as companies are not forced to record themselves as franchises. Many companies state to work by franchising even if they don’t fulfil the rules established by the European Code of Ethics for franchising.
One clear instance is represented by some pizza restaurants arranging franchise agreements where the 2 parties are not at all free neither under the juridical or financial aspect, because the franchisor holds a stake in the franchisee business. According to the Hungarian Franchise Association there are an estimated 250 franchise networks and about 25.000 franchises.
The Hungarian jurisprudence hasn’t still developed any specific law to impact franchising, appealing directly to the European Code of Ethics for franchising, came into force in Hungary on the 1st January 1991…
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