Written By: Bandana Gupta

Coffee has always been cherished in Indian homes, but now it's a booming business.Young urbanites seeking premium experiences have helped India, historically a tea-drinking nation, embrace coffee culture. This shift has propelled coffee franchises to rapid growth, attracting significant investments, especially over ₹10 lakhs. Let's dive into the world of coffee franchise and explore the brands that are brewing success stories across the country.

The Rise of Coffee Culture in India

Gone are the days of traditional coffee shops—today’s café scene is led by fast-growing franchise brands backed by strong brand power and proven business models. For investors, coffee franchises requiring over ₹10 lakh offer a solid opportunity for high returns.

India’s coffee journey began centuries ago in the South, but the café culture we see today took off in the late '90s and early 2000s with the arrival of global coffee chains. Whether in bustling metros or emerging tier-II towns, the demand for quality, speciality coffee experiences is booming.

Why Starting a Coffee Franchise Business in India Can Yield High Returns in 2025

Coffee sales in India are predicted to treble by 2030, expanding nearly twice as quickly as in the U.S. . This is more than a passing trend; it reflects a cultural shift in how coffee is consumed and experienced. For those considering investments over ₹10 lakhs, here’s why the coffee franchise space is especially promising:

• Soaring Demand: A growing urban population and an emerging middle class are fueling strong demand for premium coffee. Cafés have become lifestyle hubs for working, socialising, and relaxing, not just places to grab a drink.
• Strong Franchise Brands: Partnering with a known brand gives you instant recognition, trust, and customer loyalty, minimising the risks of starting a new business from scratch.
• Proven Business Models: Franchisees benefit from ready-to-run operations, including staff training, supply chain systems, and regular marketing support, all designed to help you succeed faster.
• Flexible Formats: Brands now offer multiple formats like small kiosks, cloud kitchens, and large flagship stores, making it easier to match investment size with market potential.
• Policy & Institutional Support: The Coffee Board of India encourages sector growth through various schemes like digital permits, export benefits, and machinery subsidies.

This combination of rising demand, trusted brands, scalable models, and policy support makes the Indian coffee franchise market a smart, future-ready investment.

Leading Coffee Franchise Brands in India are Experiencing Rapid Growth and Expansion in 2025

Many coffee franchise brands are at the forefront of this growth wave, showing strong expansion and presenting lucrative options for investors ready to invest ₹10 lakhs or more. The following brands offer a clear picture of what's trending and what it takes to get started:

Barista Coffee: 

One of the first premium coffee chains in India, Barista offers an Italian-style café experience. You’ll need around ₹15–30 lakhs to start, including a franchise fee of ₹5–7 lakhs. They offer full training and marketing support.

The Coffee Bean & Tea Leaf:

A well-known global brand that offers premium coffee and tea. Starting a franchise requires a bigger investment for various locations, international branding and quality.

Third Wave Coffee:

• Flexible Setup: A franchise strategy that operates in 500–1000 sq. ft. facilities is convenient for diverse locales.
• Franchise Fee & Royalty: Requires a one-time franchise fee of ₹6 lakhs (taxes included) and a 5% royalty on sales.
• Customer Experience: Focuses on creating a cozy, modern café vibe with high-quality coffee and an inclusive, welcoming space.

Blue Tokai Coffee Roasters

• Premium Indian Coffee: Known for using top-quality beans sourced directly from Indian coffee estates.
• Direct Trade Ethos: Builds strong, direct partnerships with farmers, ensuring transparency and fair practices.
• Origin Story: Started with small-batch roasting at home due to the lack of good coffee options in North India—now a trusted name in artisanal coffee.
•  To open a Blue Tokai outlet, you'll need to invest between ₹20 and 50 lakh. You'll also be charged a 5% royalty fee on your total sales.

Café Coffee Day (CCD)

Franchise Revamps: They are likely undergoing franchise revamps to adapt to the evolving coffee market and changing consumer preferences. A standard CCD franchise may cost over ₹10 lakhs + GST, with a royalty fee of 5%–8%.

Costa Coffee:

Devyani International is the company that manages the operations of the well-known global coffee brand, Costa Coffee, in India. Investment for a full café is ₹1–1.5 crore, but their "Smart Café" kiosk model offers a smaller, more affordable entry point.

90 Degree Coffee:

A brand that blends local and global coffee culture. The investment ranges from 5 lakhs to 15 lakhs, based on the type (café or quick speciality).

How Indian Speciality Coffee Brands Are Scaling Successfully Across Urban and Tier-2 Markets

The Indian specialty coffee market is currently experiencing a dynamic phase of rapid growth and significant investor interest, driven by a confluence of demographic, economic, and cultural shifts. The scalability of specialty coffee brands in India is a key factor attracting investors. Here's why:

Growing Consumer Base:

India's large and increasingly affluent young population (Millennials and Gen Z) is driving the demand for premium coffee experiences. These demographics are well-traveled, more discerning, and willing to pay a premium for quality, unique flavors, and ethically sourced products. This move away from instant coffee and traditional tea towards specialty brews is opening up a huge, unexplored market.

Urbanization and Cafe Culture:

Rapid urbanization is fostering a thriving cafe culture. Coffee shops are no longer just places to grab a quick beverage; they are becoming third spaces for work, social gatherings, and lifestyle expression. This trend supports the scalability of physical outlets.

While metros were the initial focus, speciality coffee businesses are now carefully expanding into Tier 2 and Tier 3 locations. 

These markets represent the "next frontier" for growth, as consumers in these regions also seek global-grade experiences within their cities. This geographical expansion significantly increases the overall addressable market.

Diversified Business Models:

Scalability isn't limited to just opening more cafes. Brands are exploring various formats:

Compact Kiosks/On-the-go Models:

Ideal for high-footfall areas like airports, railway stations, and corporate parks, requiring lower initial investment.

Flagship Cafes:

Larger formats offering a comprehensive experience.

Direct-to-Consumer (D2C) & Online Sales:

This segment is growing rapidly, especially post-pandemic, allowing brands to reach consumers directly through e-commerce for roasted beans, ground coffee, and brewing equipment for home consumption.

Ready-to-Drink (RTD) Coffee:

This convenience specialty caters to on-the-go lifestyles and offers another avenue for widespread distribution.

Supply Chain and Roasting Capabilities:

Leading speciality coffee brands are investing in robust supply chains, including direct sourcing from Indian coffee estates, and establishing their roasting facilities. This vertical integration allows them to control quality, ensure consistency, and optimize costs, which is crucial for scalable operations.

Technology Integration:

Mobile apps for ordering, loyalty programs, and digital marketing are becoming standard, enhancing customer engagement and operational efficiency across multiple outlets.

Increasing Capital Flow Into Indian Speciality Coffee Franchising Opportunities by 2025

India's speciality coffee business is attracting investors due to increased investment, promising development, and strong customer demand.  Here’s why this sector is catching the attention of serious investors:

In the past two years, Indian speciality coffee chains have received approximately 830 Crore in funding. This is a dramatic increase, far surpassing the ₹180 Crore raised in the four years prior.This sharp rise shows growing investor belief in the market's long-term value.

Well-Known Backers: 

Global firms like Verlinvest have led major funding rounds for brands such as Blue Tokai, with continued support from top Indian investors like A91 Partners and Anicut Capital. Their involvement shows they believe the Indian specialty coffee market will grow fast and give good returns.

Better Profitability: 

Specialty coffee cafés offer stronger unit economics than direct-to-consumer (D2C) models without physical stores. With revenues from dine-in, takeaway, delivery, and packaged goods, these brands show more sustainable profitability.

By 2030, the Indian coffee market is likely to treble, and speciality coffee will be crucial. This makes it an attractive area for venture capital and private equity investments.

Huge Room for Growth: 

Despite being the third-largest coffee producer, India’s per capita consumption is still far below the global average. This under-penetration suggests vast untapped potential for local and global players.

Urban consumers, especially younger ones, are willing to spend more on high-quality brews and café experiences, driving demand for speciality formats.

Global Brand Expansion: 

International players like Starbucks, Costa Coffee, and Tim Hortons are expanding aggressively in India. According to Costa Coffee, India is a massive market for the future.  They're so confident that they plan for India to become one of their top five global markets by 2030. This shows their strong, long-term belief in the country's coffee potential.

Third Wave Coffee and Blue Tokai are fast-growing Indian brands that have raised significant funding.  Their success stories reinforce that the business model works and scales within India.

Conclusion:

The Indian specialty coffee sector shines brightly with potential for expansion. Its inherent scalability, coupled with strong investor interest driven by favorable demographics, evolving consumer preferences, and robust market dynamics, positions it as a highly attractive sector for significant investment

Disclaimer: The brands mentioned in this blog are the recommendations provided by the author. FranchiseBAZAR does not claim to work with these brands / represent them / or are associated with them in any manner. Investors and prospective franchisees are to do their own due diligence before investing in any franchise business at their own risk and discretion. FranchiseBAZAR or its Directors disclaim any liability or risks arising out of any transactions that may take place due to the information provided in this blog.