Ferenz Feher and the Social Values of Franchising

Ferenz Feher has been in franchising for more than 25 years and there is still much work to be done. In a long-ranging discussion with Franchising World, Feher discusses his values as an entrepreneur, the difference between social franchising and philanthropy, the rise of franchising in Mexico and the effects of immigration politics in the United States.

By Radim Dragomaca and J.P. Carroll

When looking at the franchising business model outside of the U.S., the work done by Mexican franchisor, entrepreneur and philanthropist Ferenz Feher, founder and CEO of Feher & Feher, stands out. Feher, who received the International Franchise Association’s 2016 Ronald E. Harrison Diversity Award during #IFA2017 in February, recently spoke with Franchising World about his incredible life and career.

Feher began his franchising career over 25 years ago with an electronics repair business while wrapping up his university studies. The business seemed like a natural fit since his father owned an electronics business. After being hired by what Feher calls “the Mexican Radio Shack” of the time, he helped the firm open its first 40 units when it adopted the franchising business model and ended up keeping eight of them for himself. “I know franchising both as the franchisor and franchisee, and that’s why I love being a consultant,” he said. “I’m still a franchisor. I have 120 units of a tailoring and alteration business. We have a few of our own, around eight of the 120; the rest are franchised to third parties. I am currently no longer a franchisee for other companies,” Feher said.

As a pioneer in the Mexican franchising industry, Feher recalls with great clarity the fact that he started in the business in 1988 and only a year later, in 1989, the Mexican Franchise Association was founded. In the years that followed, Feher became increasingly involved with the Mexican Franchise Association and ultimately became its President for two years, 2003 and 2004. Feher went on to represent Mexico before the World Franchise Council. Ultimately, Feher served as the Vice-Secretary of the World Franchise Council.

“In the early years, franchising was very new to the Mexican market; there wasn’t any business literature about it,” he said. “Initially, franchises from elsewhere, such as the U.S., were brought into Mexico. Ultimately when exporting a franchise, I like to say that, ‘Initially 99 percent of it goes through the mouth.’ Meaning: we imported fast food franchises from the U.S., such as hamburger and pizza restaurants, in the first stage of Mexican franchising.” Despite humble beginnings, Feher is “optimistic” about the “bright future” of the franchise business model in Mexico and beyond.

“I can tell you right now that 86 percent of the 1,500 brands that are franchising in Mexico are Mexican. The remaining 14 percent are mostly from the U.S. Franchising is a booming business model as we now enter a new phase with Mexican franchises setting up shop abroad, such as Prendamex, a pawn shop that now has a location in East Los Angeles,” Feher said. The businessman went on to note that he found it interesting that some undocumented Mexican franchisees who may have to leave the U.S. still want to continue investing in the franchising business model if they move back to Mexico. “In a way, we’re doing a favor to this new [Trump] Administration, by luring back Mexicans that are illegally in the U.S. and having them invest in Mexican franchise businesses in their homeland,” Feher explained.

With all his success, Feher also believes it is of the utmost importance to dedicate a great deal of his time and personal wealth to philanthropy and social franchising ventures. “I think that I’m the first consultant in Mexico to address topics like micro franchising and through this work, it’s a way of truly influencing and promoting diversity in this industry. If I can positively impact the lives of at-risk and underprivileged populations and integrate them in the mainstream,” said Feher, who is is a member of IFA’s Social Sector Task Force.

Something Feher is particularly proud of is his involvement in the creation of Mujeres Unidas por la Salud, which translates to Women United for Health and is known as MUSA. Feher believes that “the only way to reach young people who are obese is to teach their mothers how to cook healthy food that is good for their own health as well as that of their children. Obesity often causes many other diseases and tackling this problem is very important.” So far, more than 10,000 women have received assistance from MUSA, according to Feher.

The one thing that Feher wants but doesn’t have, is more time, to help more people. “A young entrepreneur that reached out to me for advice, I now mentor through WhatsApp because of my busy travel schedule!” When it comes to franchising and philanthropy, Feher’s personal philosophy is to “try to give more each day as a philanthropist to many organizations, but it will never be enough. But if we develop social franchising and help teach people how to use the commercial formula of a franchise to be developed for creating wealth for those in need, that’s my goal in life. I think that really, making money should not be our goal, it is merely a consequence of striving for excellence.”

Radim Dragomaca is a Manager for VetFran, a strategic initiative of the International Franchise Association and J.P. Carroll is an Editorial Intern at the International Franchise Association.